Does Death Compensation from VA be disclosed in filing bankruptcy? 18 Answers as of June 04, 2013

Widow of Vet dies of Service connected death. She receives DIC payment for compensation from VA. It is exempt from taxes due to the fact it is not considered income, but compensation. Does this have to be disclosed as well even though it is not considered income?

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The Wooten Legal Consulting, PC | Antoinette M. Wooten
I would list it in your petition. The trustee can address this matter later.
Answer Applies to: New York
Replied: 6/4/2013
Law Office of Jeffrey Solomon
Law Office of Jeffrey Solomon | Jeffrey Solomon
All income received must be disclosed in the bankruptcy whether or not the income is taxable. The court would look at your overall budget. You should consult an attorney.
Answer Applies to: Florida
Replied: 6/4/2013
Law Office of D.L. Drain, P.A.
Law Office of D.L. Drain, P.A. | Diane L. Drain
Please understand that bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step.
Answer Applies to: Arizona
Replied: 6/4/2013
Portland Bankruptcy Law Group
Portland Bankruptcy Law Group | Christopher J. Kane
Yes, when you file bankruptcy you are required to disclose all sources of income you are receiving.
Answer Applies to: Oregon
Replied: 6/4/2013
Danville Law Group | Scott Jordan
You should disclose and then exempt under any available exemption.
Answer Applies to: California
Replied: 6/3/2013
    Michael B. McFarland, P.A. | Michael B. McFarland
    All income is to be disclosed, including exempt income, compensation, etc. You should contact an experienced bankruptcy attorney for assistance in preparing the schedules.
    Answer Applies to: Idaho
    Replied: 6/3/2013 | Rustin Polk
    The bankruptcy documents are asking you to list both compensation AND income, as you've described those terms. You're being asked to describe all the money you've received lately, not just the part attributable to your job. Now once you list it, you're not necessarily going to lose it. If you DON'T list it and it comes to light later on, that is what probably would cause you to lose it. Bottom line, there is no incentive - nothing to be gained - in leaving it out.
    Answer Applies to: Texas
    Replied: 5/31/2013
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Yes, that must be disclosed on means test form.
    Answer Applies to: California
    Replied: 5/31/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Bankruptcy laws do not concur that because a source of money isn't taxable that it is not income. The tax laws and the bankruptcy laws are not consistent with each other.BTW, if the widow dies, there would be no compensation. I am assuming that the serviceman died and the widow receives compensation. Yes, this compensation must be reported on both the Means Test and the budget.
    Answer Applies to: Nevada
    Replied: 5/31/2013
    Weber & Phillips, P.A.
    Weber & Phillips, P.A. | John G. Phillips
    Yes. You have to disclose it. Exempt from taxation does not mean exempt from bankruptcy.
    Answer Applies to: Arkansas
    Replied: 5/31/2013
    Hayward, Parker, O'Leary & Pinsky, Esqs.
    Hayward, Parker, O'Leary & Pinsky, Esqs. | Michael O'Leary
    You would have to disclose such income in your bankruptcy. If received within six months of your bankruptcy filing it would have to be included as income on your Means Test (the eligibility test for Chapter 7), but the funds (as you describe) would be exempt from Chapter 7 Trustee's reach. You should thoroughly go over this matter with competent bankruptcy counsel prior to filing.
    Answer Applies to: New York
    Replied: 5/31/2013
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