How would my mother’s status affect chapter 7 bankruptcy filing?
My mother worked full time for about 14 years. She has a disability now that was once just a condition until it got progressively worse. She always made about $90k. The catch is that she has disability insurance that pay only 75% if your gross income to you of you become disabled. She became disabled in 2023. She is no longer an active employee. She is paid every 1st of the month a check for $6,200. I think but am not certain no social security or any tax is taken out. I know she has to write a check to her former employer for about $900 each month to stay enrolled in the former employer’s high deductible health plan. My mom has a ton of credit card and medical/dental debt. It’s above $140k. She would pass the chapter 7 means test because we she lives in Minnesota and the median income for a 1 person household is about $76k. Her attorney is not sure if the chapter 7 is going to look at her original $90k salary which she only gets the 75% of. I would think it would be the $6,200*12 months she ACTUALLY gets which is only an annual income (gross income) of $74,400 and that would put her below the state median and let her qualify for chapter 7. I’m not providing her any advice but I’m hearing what her attorney told her and am shaking my head. When I filed for chapter 7 they looked at my gross income of total income of all sources. She should absolutely qualify for chapter 7.