Will Filing Bankruptcy Affect My Social Security Disability?

will filing bankruptcy affect my social security disabilityFor those who receive Social Security Disability (SSD) benefits, filing for bankruptcy can be a tricky situation. The goal of filing for bankruptcy is to get out of debt, but the process can impact your SSD benefits.

Before you take any action, it’s important to understand exactly how filing for bankruptcy will affect your disability payments and what other options you may have available.

Filing for Chapter 7 Bankruptcy

If you are receiving SSD benefits, filing for Chapter 7 bankruptcy will generally not impact your disability payments because those funds are exempted from being taken away as a result of bankruptcy proceedings. This means that even if you file for Chapter 7 bankruptcy and liquidate your assets, the court cannot seize or take away your SSD payments.

However, keep in mind that if you have a bank account where you deposit these funds, the court could seize that account during the liquidation process. To avoid this problem, it’s best to keep your SSD funds in an account separate from any other accounts or assets.

Filing for Chapter 13 Bankruptcy

If you decide to file for Chapter 13 bankruptcy – which sets up a payment plan with creditors over an extended period – your Social Security Disability payments will remain exempt from seizure by the court.

That said, the court may require that you use some of these funds to pay off creditors as part of your repayment plan depending on how much debt you owe and how much income is coming in every month. It’s important to work closely with a lawyer when considering filing for Chapter 13 bankruptcy so they can help ensure that the resulting repayment plan does not leave you unable to meet basic living expenses each month.

In either chapter, filing for bankruptcy will not directly affect Social Security Disability payments. The court exempts those funds from court seizure due to bankruptcy proceedings.

Alternatives to Bankruptcy

Of course, before taking any drastic measures such as filing for bankruptcy, it’s important to consider other potential solutions such as debt consolidation loans or applying for government assistance programs.

These solutions may provide relief without having long-lasting negative impacts on your SSD benefits and credit score. If necessary, speak with a financial advisor. They’ll guide you through the steps necessary and ensure that whatever route you choose is the best available given your unique financial situation.

Wondering if bankruptcy will affect social security disability? For more information or to speak to someone about bankruptcy and your SSD benefits, contact the Law Offices of Robert M. Geller at 813-254-5696 to discuss your situation with an experienced attorney.


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