What happens in bankruptcy if your social security income pushes you above the median income threshold?

Nothing at all.  (It doesn’t count as income).

The court cannot require you to contribute SSI  towards the repayment of your creditors.  This means that SSI is not included in the calculation of your 6 month average of income (the 6 month CMI) and it is not included in your forward looking income analysis called the “Projected Disposable Income” (“PDI”).

Within the last two years, a bankruptcy court case here in Utah was appealed to a Federal District Court and then to the 10th Circuit Court of Appeals.  The 10th Circuit found in In re Cranmer, 697 F.3d 1314, 1319 (10th Cir. 2012), that “SSI need not be included in the calculation of projected disposable income and … failure to include it is not grounds for finding he did not propose his plan in good faith.”

In other words, even if you receive SSI, and even if it would normally push you over the border between a chapter 7 and a chapter 13 case, your attorney does not have to count that income, and you do not have to use it to pay back your creditors.

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