66 East Main Street, 3rd Floor Little Falls, NJ 07424

Creditors Do Not Receive Share of $ Debtor Receives for Disabled Childcare

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  • Debtor Filed Chapter 13 Bankruptcy
  • Debtor waived Medicare benefits for home care to her son; rather than son being cared for in a hospital or nursing home.
  • Trustee objected stating all of disposable income should be devoted to paying back creditors, including the benefits for care of her son.
  • Trustee argued that the benefits should be included since an outside agency hired by the State pays this amount rather than the State directly.

Court Findings:

  • Judge disagreed with the Trustee.
  • Court did not look at whether the money came from the state rather than SS Administration or another State hired agency.
  • Benefits qualify same as benefits received under the Social Security Act and was similar to the money foster parents receive.

Positive outcome:

Family can continue to care for their 22 year old autistic son who is wheelchair bound.

This ruling greatly benefits the son, the family and the government.   If the son were taken out of the care of the mother, the costs would be much more, excluding the emotional benefits to the son and mother.