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Topic #10:: Income: Does it include withdrawal of assets, disability insurance proceeds, tax credits

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Means Test > Income > Insurance Proceeds

Income: Does it include withdrawal of assets, disability insurance proceeds, tax credits

19 Cases , IssueID 10

Ch 7 Means Test
Form 22A, Line 07
Ch 13 Means Test
Form 22C Line 06

Topic Description:

(Spring 2006)) OUST contends that it includes: gambling winnings, cash gifts (even if not otherwise a "regular contribution"), litigation proceeds, trust income, disability and other non-Social Security disability payments but excludes Social Security benefits (e.g., retirement, survivors, and disability), tax refunds, and loan proceeds.

Does not include income tax refunds

Lines of Cases:

A:

Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included."

B::

Income includes replacement income (e.g. proceeds of a private disability insurance policy

C:

Income includes "earned income tax credit"

D:

includes unemployment compensation benefits

E:

"Everything else..."

  • Type A = Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included."
  • Type B = Income includes replacement income (e.g. proceeds of a private disability insurance policy
  • Type C = Income includes "earned income tax credit"
  • Type D = includes unemployment compensation benefits
  • Type E = "Everything Else"
  • Cases for Zip
  • All Cases By Date
  • Cases A - Z

Cases for Zip , California Northern District Bankruptcy Court

Ninth Circuit Cases

� In re Blausey (Blausey v. U.S. Trustee)

9th Cir. - 552 F.3d 1124 - 2009-01-23 - 7 , N/A

Google ID#: 7068307081325044770
(Type B : Income includes replacement income (e.g. proceeds of a private disability insurance policy )

Income includes replacement income (e.g. proceeds of a private disability insurance policy

Other Circuits

� In re Killian

Bankr. N.D.Ill. - 422 BR 903 - 2009-11-12 - ,

Google ID#: 4025824453885956476
(Type E : )

Loan proceeds are not income, but when is a loan not a loan? Judge sets out factors to indicate whether a loan is really a loan.

� In re Kucharz

C.D.Illinios - 418 BR 635 - 2009-10-28 - 13 , Above

Google ID#: 13603416160589900631
(Type D : includes unemployment compensation benefits )

unemployment benefits are not "received under the Social Security Act," as that phrase is used in Section 101(10A). This Court agrees with Baden, and disagrees with Munger and Sorrell.

� In re Durczynski

Bankr. N.D. Ohio - 405 B.R. 880 - 2009-04-29 - 7 ,

Google ID#: 2693340087557439656
(Type E : )

tax refunds constitute a source of income so long as there is a realistic prospect of similar refunds in the future.

� In re Burrell

Bankr. C.D. Ill. - 399 B.R. 620 - 2008-12-11 - 13 ,

Google ID#: 10300179503322631893
(Type E : )

Includes mones recieved, regardless of when it was derived.

� In re Almonte

Bankr.E.D.N.Y. - 397 B.R. 659 - 2008-12-09 - 13 ,

Google ID#: 6755918032951330919
(Type E : )

Credit card advances are not included in CMI.

� In re Royal

Bankr. N.D. Ill. - 397 BR 88 - 2008-11-07 - 13 , Below

Google ID#: 1860314543439543663
(Type C : Income includes "earned income tax credit" )

� In re Wyatt

Bankr. E.D.Va. - NO. 08-14792 - 2008-10-10 - 13 , Above

Google ID#: 15481265597267937745
(Type B : Income includes replacement income (e.g. proceeds of a private disability insurance policy )

veterans disability benefits must be included in income

� In re Hedge

Bankr. S.D. Ind. - 394 B.R. 463 - 2008-09-17 - 13 ,

Google ID#: 8746666696092057958
(Type E : )

Debtor's veterans benefits had to be included in calculation of debtor's CMI as such benefits are not specifically excluded from CMI by statute

� In re Zahn

8th Cir. BAP - 391 B.R.840 - 2008-08-14 - 13 ,

Google ID#: 16622334845024469744
(Type A : Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included." )

� In re Marti

Bankr. Neb. - 393 B.R. 697 - 2008-08-04 - 13 , Below

Google ID#: 15496126422987594743
(Type A : Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included." )

� In re DeThample

Bankr.D.Kan. - 390 B.R. 716 - 2008-06-24 - 13 , Above

Google ID#: 4463196841896265883
(Type E : )

� In re Waters

Bankr.N.D.W.Va. - 384 B.R. 432 - 2008-01-24 - 13 , N/A

Google ID#: 14073490571800026981
(Type E : )

Debtor's veterans benefits had to be included in calculation of debtor's CMI as such benefits are not specifically excluded from CMI by statute

� In re Warren

Bankr.M.D.Ala. - 2007 WL 2683837 - 2007-09-06 - 13 , Above

Google ID#:
(Type : )

� In re Breeding

Bankr.E.D.Ar. - 366 B.R. 21 - 2007-05-14 - 13 , Above

Google ID#: 7387404966613893375
(Type A : Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included." )

proceeds from the redemption of two certificates of deposit that were owned pre-petition constitute disposable income

� In re Luton

Bankr.W.D.Ark. - 363 B.R. 96 - 2007-03-08 - 13 , Below

Google ID#: 11583661826008784613
(Type : )

� In re Laplana

Bankr. M.D. Fla - 363 B.R. 259; 267 - 2007-02-09 - 13 , Above

Google ID#: 3304297329228665894
(Type C : Income includes "earned income tax credit" )

Future tax refund is income to be included in Projected Disposable Income for above-median Chapter 13 debtors.

"Thus, the means test allows debtors to deduct the actual expenses for federal, state, and local taxes; 267 it does not allow debtors to over-estimate or over-withhold. Rather, the expense must be the debtor's actual tax liability, no more and no less. To hold otherwise would enable a debtor to maintain a secret savings account, in the form of tax withholdings, at the expense of their unsecured creditors. By requiring the turnover of these future tax refunds to the Chapter 13 Trustee, a court is simply correcting a debtor's error of over-estimating his or her tax liability made when completing the means test. By correcting the error, the amount of the debtor's disposable income automatically increases by the amount of the tax refund the debtor received, which amount rightfully should be paid to the debtor's creditors. Therefore, even if the means test calculations and concomitant historical, frozen-in-time implications are binding, debtors still must turnover future tax refunds to the Chapter 13 Trustee."

� In re Sanchez

Bankr.W.D.Mo. - 2006 WL 2038616 - 2006-07-13 - 13 , Above

Google ID#: 4463196841896265883
(Type : )

� In re Schley

Bankr. E.D.Wis. - - - ,

Google ID#:
(Type E : )

Debtor's income from seasonal work was included in the CMI calculation. The court said, "Congress chose to define CMI using a six month, not one year, calculation of income, and there is no evidence that teachers or other debtors who work only part of the year were intended to be exempt from the means test."

� In re Killian

Bankr. N.D.Ill. - 422 BR 903 - 2009-11-12 - ,

Google ID#: 4025824453885956476
(Type E : )

Loan proceeds are not income, but when is a loan not a loan? Judge sets out factors to indicate whether a loan is really a loan.

� In re Kucharz

C.D.Illinios - 418 BR 635 - 2009-10-28 - 13 , Above

Google ID#: 13603416160589900631
(Type D : includes unemployment compensation benefits )

unemployment benefits are not "received under the Social Security Act," as that phrase is used in Section 101(10A). This Court agrees with Baden, and disagrees with Munger and Sorrell.

� In re Durczynski

Bankr. N.D. Ohio - 405 B.R. 880 - 2009-04-29 - 7 ,

Google ID#: 2693340087557439656
(Type E : )

tax refunds constitute a source of income so long as there is a realistic prospect of similar refunds in the future.

� In re Blausey (Blausey v. U.S. Trustee)

9th Cir. - 552 F.3d 1124 - 2009-01-23 - 7 , N/A

Google ID#: 7068307081325044770
(Type B : Income includes replacement income (e.g. proceeds of a private disability insurance policy )

Income includes replacement income (e.g. proceeds of a private disability insurance policy

� In re Burrell

Bankr. C.D. Ill. - 399 B.R. 620 - 2008-12-11 - 13 ,

Google ID#: 10300179503322631893
(Type E : )

Includes mones recieved, regardless of when it was derived.

� In re Almonte

Bankr.E.D.N.Y. - 397 B.R. 659 - 2008-12-09 - 13 ,

Google ID#: 6755918032951330919
(Type E : )

Credit card advances are not included in CMI.

� In re Royal

Bankr. N.D. Ill. - 397 BR 88 - 2008-11-07 - 13 , Below

Google ID#: 1860314543439543663
(Type C : Income includes "earned income tax credit" )

� In re Wyatt

Bankr. E.D.Va. - NO. 08-14792 - 2008-10-10 - 13 , Above

Google ID#: 15481265597267937745
(Type B : Income includes replacement income (e.g. proceeds of a private disability insurance policy )

veterans disability benefits must be included in income

� In re Hedge

Bankr. S.D. Ind. - 394 B.R. 463 - 2008-09-17 - 13 ,

Google ID#: 8746666696092057958
(Type E : )

Debtor's veterans benefits had to be included in calculation of debtor's CMI as such benefits are not specifically excluded from CMI by statute

� In re Zahn

8th Cir. BAP - 391 B.R.840 - 2008-08-14 - 13 ,

Google ID#: 16622334845024469744
(Type A : Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included." )

� In re Marti

Bankr. Neb. - 393 B.R. 697 - 2008-08-04 - 13 , Below

Google ID#: 15496126422987594743
(Type A : Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included." )

� In re DeThample

Bankr.D.Kan. - 390 B.R. 716 - 2008-06-24 - 13 , Above

Google ID#: 4463196841896265883
(Type E : )

� In re Waters

Bankr.N.D.W.Va. - 384 B.R. 432 - 2008-01-24 - 13 , N/A

Google ID#: 14073490571800026981
(Type E : )

Debtor's veterans benefits had to be included in calculation of debtor's CMI as such benefits are not specifically excluded from CMI by statute

� In re Warren

Bankr.M.D.Ala. - 2007 WL 2683837 - 2007-09-06 - 13 , Above

Google ID#:
(Type : )

� In re Breeding

Bankr.E.D.Ar. - 366 B.R. 21 - 2007-05-14 - 13 , Above

Google ID#: 7387404966613893375
(Type A : Income is "money from one's business, labor, or capital invested; gains, profits, salary, wages...the corpus of assets and investments are not included." )

proceeds from the redemption of two certificates of deposit that were owned pre-petition constitute disposable income

� In re Luton

Bankr.W.D.Ark. - 363 B.R. 96 - 2007-03-08 - 13 , Below

Google ID#: 11583661826008784613
(Type : )

� In re Laplana

Bankr. M.D. Fla - 363 B.R. 259; 267 - 2007-02-09 - 13 , Above

Google ID#: 3304297329228665894
(Type C : Income includes "earned income tax credit" )

Future tax refund is income to be included in Projected Disposable Income for above-median Chapter 13 debtors.

"Thus, the means test allows debtors to deduct the actual expenses for federal, state, and local taxes; 267 it does not allow debtors to over-estimate or over-withhold. Rather, the expense must be the debtor's actual tax liability, no more and no less. To hold otherwise would enable a debtor to maintain a secret savings account, in the form of tax withholdings, at the expense of their unsecured creditors. By requiring the turnover of these future tax refunds to the Chapter 13 Trustee, a court is simply correcting a debtor's error of over-estimating his or her tax liability made when completing the means test. By correcting the error, the amount of the debtor's disposable income automatically increases by the amount of the tax refund the debtor received, which amount rightfully should be paid to the debtor's creditors. Therefore, even if the means test calculations and concomitant historical, frozen-in-time implications are binding, debtors still must turnover future tax refunds to the Chapter 13 Trustee."

� In re Sanchez

Bankr.W.D.Mo. - 2006 WL 2038616 - 2006-07-13 - 13 , Above

Google ID#: 4463196841896265883
(Type : )

� In re Schley

Bankr. E.D.Wis. - - - ,

Google ID#:
(Type E : )

Debtor's income from seasonal work was included in the CMI calculation. The court said, "Congress chose to define CMI using a six month, not one year, calculation of income, and there is no evidence that teachers or other debtors who work only part of the year were intended to be exempt from the means test."

All Cases A to Z

  • In re Almonte, 397 B.R. 659 , (Bankr.E.D.N.Y. ) 2008-12-09, #6755918032951330919
  • In re Blausey (Blausey v. U.S. Trustee), 552 F.3d 1124 , (9th Cir. ) 2009-01-23, #7068307081325044770
  • In re Breeding, 366 B.R. 21 , (Bankr.E.D.Ar. ) 2007-05-14, #7387404966613893375
  • In re Burrell, 399 B.R. 620 , (Bankr. C.D. Ill. ) 2008-12-11, #10300179503322631893
  • In re DeThample, 390 B.R. 716 , (Bankr.D.Kan. ) 2008-06-24, #4463196841896265883
  • In re Durczynski, 405 B.R. 880 , (Bankr. N.D. Ohio ) 2009-04-29, #2693340087557439656
  • In re Hedge, 394 B.R. 463 , (Bankr. S.D. Ind. ) 2008-09-17, #8746666696092057958
  • In re Killian, 422 BR 903 , (Bankr. N.D.Ill. ) 2009-11-12, #4025824453885956476
  • In re Kucharz, 418 BR 635 , (C.D.Illinios ) 2009-10-28, #13603416160589900631
  • In re Laplana, 363 B.R. 259; 267 , (Bankr. M.D. Fla ) 2007-02-09, #3304297329228665894
  • In re Luton, 363 B.R. 96 , (Bankr.W.D.Ark. ) 2007-03-08, #11583661826008784613
  • In re Marti, 393 B.R. 697 , (Bankr. Neb. ) 2008-08-04, #15496126422987594743
  • In re Royal, 397 BR 88 , (Bankr. N.D. Ill. ) 2008-11-07, #1860314543439543663
  • In re Sanchez, 2006 WL 2038616 , (Bankr.W.D.Mo. ) 2006-07-13, #4463196841896265883
  • In re Schley, , (Bankr. E.D.Wis. ) , #
  • In re Warren, 2007 WL 2683837 , (Bankr.M.D.Ala. ) 2007-09-06, #
  • In re Waters, 384 B.R. 432 , (Bankr.N.D.W.Va. ) 2008-01-24, #14073490571800026981
  • In re Wyatt, NO. 08-14792 , (Bankr. E.D.Va. ) 2008-10-10, #15481265597267937745
  • In re Zahn, 391 B.R.840 , (8th Cir. BAP ) 2008-08-14, #16622334845024469744

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