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Is Income from Veterans’ Benefits Included in the Bankruptcy Means Test

The Means Test

Veterans Income included in means test Patriotic abstract background with stars. Place for text. HolidaTo qualify for Chapter 7, every debtor must pass the Bankruptcy “Means Test.”  The test is designed to take your income and measure it against your actual expenses as well as the average person’s income and expenses.  The test is used to determine whether or not you have excess income available to pay your debts.  In short, if it is found that you don’t have excess income, then you will qualify for a Chapter 7.  If you do, then you still have the option to file a Chapter 13.

Income from Veterans’ Benefits

Although there are some exceptions (see below), income from Veterans’ Benefits is included when calculating income for income for the means test.  Like, unemployment income, and income from state disability, income from Veterans’ Benefits are taken into account when filing for bankruptcy.  However as discussed below, there is an exception.

Disabled Veterans Exception for the Means Test

There are exceptions in certain circumstances which allow Debtors the ability to file Chapter 7 bankruptcy without passing the means test.  One of those exceptions are for disabled veterans.  Debtors do not need to pass the means test if they are Veterans that have been rated by the Veterans Administration as at least 30% disabled or discharged as a result of a disability incurred in the line of duty.