If I Have Filed for Bankruptcy Can I File for Disability?
You never know what accidents and incidents in life will cause your financial ruin. You may find yourself with more debt than you can pay down on your current schedule. Rather than continue the struggle you should seek legal protection. A declaration of bankruptcy will get you the kind of protection that you need.
If you are on Social Security benefits, you can still declare bankruptcy. You should not feel ashamed or embarrassed of being in this situation. Many SSDI recipients find themselves in similar financial straits and are forced to seek protection under bankruptcy laws. Our Social Security lawyers Towson Maryland know how to help people in your predicament. Our SSDI attorneys will show you care and compassion; and most importantly, they will fight to preserve your rights and your SSDI benefits.
Bankruptcy and SSDI Benefits
There are two types of bankruptcy: Chapter 13 and Chapter 7. Chapter 13 is a debt restructuring plan. It allows you to repay your creditors over a period of 3 to 5 years. None of your assets, including your SSDI benefits, are at-risk under this plan. A Chapter 7 bankruptcy amounts to the liquidation of your assets. The court allows your creditors to seize and sell many of your assets to cover your debts. However, you will be allowed to keep enough to live on.
Even under Chapter 7, your SSDI check will probably not be jeopardized. The law limits the amount a bankruptcy court can take from these funds. You will have to show the court how much you receive from your SSDI check and how it helps you meet your basic living expenses. In some cases, the court will determine that you do not need all of the money you receive from SSDI to meet your expenses. It is always worth challenging such a ruling, and SSI attorneys know how to put together a case.
Federal law protects your SSI benefits. Creditors are not allowed to touch them. The fact that you qualify for and receive SSI benefits is proof enough that you need them to survive. Because the court is obligated to leave enough of your assets intact so that you can live, they cannot allow creditors to tap into these benefits. Your Social Security Disability attorneys will know how to ensure that you are treated fairly on this front.
Take Nothing For Granted
Most of the benefits you receive from SSDI are safe from seizure if you file for bankruptcy. However, you can take nothing for granted. You should not deal with these matters on your own. You should retain the services of a Supplemental Security Income attorney and have them by your side as you go through the bankruptcy process. Some states require that a SSDI recipient take specific actions to protect their benefits from seizure in a Chapter 7 bankruptcy filing. You may also need to prove that the money in your bank account came from a lump sum payment from SSDI back pay or the accumulation of SSDI funds.
It is also your right to put up a fight if the court rules that some of your Social Security income can be used to pay down your debt. Given that you qualified for the program, it is presumed that you need all the money and benefits that come with it. Your attorney will have the expertise and experience to make this case.
You should never assume that your position is weak and hopeless. The Social Security lawyer you hire has probably seen cases like yours before or worse. You should put the matter into their hands and allow them to use their knowledge of the law and the facts of the case to get you justice.
If you are on SSDI and need to declare bankruptcy, you should speak to the Social Security lawyers in Maryland at Gordon Wolf & Carney.