Unemployment benefits in bankruptcy

Dallas bankruptcy client who got laid off late last year. His filing a chapter 7. He’s married but spouse is not filing. She makes about 52k (gross) annually. As I understand it, his unemployment benefits need to be listed in Schedule I and Form 22(he gets $1600 a month). What this means is that their combined income is putting him above the CA State median. Unemployment benefits go on schedule I, but on form 22 you have the option of claiming that they aren’t countable income. You have to say that you are doing this, because Judge Wedoff didn’t know anything about unemployment benefits, and he thought that they are counted in CMI. Someone else on the rules/forms committee said, no, UI benefits are authorized by the social security act, so they compromised. There is a good opinion by Judge Waldron, now retired, that explains why UI benefits shouldn’t be counted in CMI. In re Sorrell, 2007 WL 211276 (Bankr. S.D.Ohio 2007), No 06-31720 (January 26, 2007). Arguably, unemployment is a benefit of the social security act and, as such, excluded from CMI, like social security. But you would list on I. As a practical matter, this is only temporary income by it’s very nature.

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