Social security income is an important source of income for many people. If you are planning to file bankruptcy, and you get social security benefits, it is important to speak with an experienced bankruptcy attorney about it.
However, in most cases you will not lose your social security benefits if you file bankruptcy.
With inflation and health care costs increasing, many seniors and disabled individuals living on social security are filing for bankruptcy.
If you are living on social security and you don’t own many assets, it might be the right time to file bankruptcy and eliminate your debt.
Is Social Security Protected in Bankruptcy?
Social security benefits are protected under the law from being included as part of your bankruptcy estate. In other words, you will not lose or decrease your monthly benefits by filing a Chapter 7 or a Chapter 13 bankruptcy.
Qualifying for Bankruptcy
Most seniors qualify to file for Chapter 7 Bankruptcy. To be eligible to file a Chapter 7 you must pass the means test. Social Security benefits are not considered as income for this test. This results in many senior citizens having zero income, or at a minimum, qualifying for a Chapter 7 filing.
Social Security as an Asset
Sometimes, if you are owed benefits from previous months, you will receive a lump sum payment. This might be considered an asset of your bankruptcy estate. Your NJ bankruptcy attorney can help you weigh your options, and decide if bankruptcy is right for you if you have received a lump sum payment. Depending upon how much the payment is, it might be protected by exemptions.
What Will Be Discharged in My Bankruptcy?
During your Chapter 7 bankruptcy, you will likely be able to discharge or eliminate most, if not all, of your unsecured debt. This includes any medical bills and credit card bills. For many of our clients this means they are no longer liable to pay thousands of dollars of debt when their case is over. Without credit card and medical bills to pay you will have more money for your daily living expenses.
Questions about Bankruptcy & Social Security? Schedule a Free Consultation with a NJ Bankruptcy Lawyer.
If you are receiving Social Security and you are considering filing for bankruptcy, let us help ensure your benefits are protected. Even simple cases require you to comply with strict legal procedures.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years. The information on this website and blogs is for general information purposes only. Nothing should be taken as legal advice for any individual case or situation.