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In re Hite (Case No. 15-51191) 09/06/2016

Debtors, a couple caring for their severely disabled son, filed bankruptcy under Chapter 13. Debtors receive payments from Public Partnership, LLC, a Virginia and Medicaid approved organization that pays Medicaid waiver benefits for their son’s homecare. The chapter 13 trustee objected to the plan under 11 U.S.C. § 1325(b) on the grounds that the debtors did not allocate all of their disposable income towards payments to unsecured creditors because they did not include the Medicaid waiver benefits as part of their disposable income.  The Court found that the Medicaid waiver benefits were received under the Social Security Act and the debtors lived with and cared for their son.  The Medicaid waiver benefits were therefore excluded from debtors’ disposable income. The Court explained that the Medicaid waiver benefits are also excluded from disposable income as foster care payments under 26 U.S.C. § 131 because the debtors provide non-medical care to their son within their own home. Accordingly, the Court overruled the trustee’s objection.

Tuesday, September 6, 2016
Chapter 13 Issues
Confirmation of Plan
Current Monthly Income
Disposable Income