Bankruptcy
Social Security Income Is Beyond Your Creditors’ Reach
I recently read an email question posted to a listserv for attorneys that I subscribe to, asking a question about a client of this attorney (who practices in a field other than bankruptcy law), who is battling cancer and is considering filing bankruptcy as a result of the medical bills and loss of income. Her only remaining income is Social Security, and she was concerned about losing that to her creditors.
As several attorneys were quick to inform the questioning attorney, Social Security income is beyond the reach of creditors. It isn’t considered as part of your disposable/current monthly income when calculating whether you need to file Chapter 13 as opposed to Chapter 7, and it can’t be forced into a payment plan against your will.
Now - can you use those benefits to pay creditors, if you want? The answer appears to be yes. But it’s not something anyone can force you into. So if you’re concerned about maintaining those benefits and that’s what’s keeping you from filing a needed case? Don’t let it stop you any longer.
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