Social Security Benefits and Bankruptcy

  Social Security is a crucial lifeline for many retired or disabled people in the United States, but oftentimes is not enough to cover both living expenses and payments towards debt. At LifeBack Law Firm, we have worked with many clients on a fixed income file for bankruptcy to improve their financial situation. A common question we receive is “will filing a bankruptcy impact my Social Security payments?” The short answer is no, but we’ll get into the long answer with this post!

In a bankruptcy, we list all assets, debts, and income sources. In your petition, we would list your right to receive Social Security as a financial asset and protect it with the applicable exemption. We would also list your Social Security benefits as monthly income, and disclose your monthly expenses. Your benefits would be fully protected in bankruptcy proceedings, so funds that can be traced back to Social Security are safe from your creditors. 

If Social Security is your sole source of income, you may be “judgment-proof”, which basically means though your creditors can bring lawsuits against you, they cannot touch your Social Security funds to pay that debt. However, many clients on Social Security still choose to file for bankruptcy for the peace of mind and to improve their credit profiles in the long term. At LifeBack Law Firm, our consultations are completely free, and our team would be happy to help you determine if bankruptcy is the best course of action for you. 

CALL NOW FOR A FREE STRATEGY SESSION FROM AN MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM

Here at LifeBack Law Firm, we are happy to help you navigate through the bankruptcy process! When the time is right, or when you are ready, reach out to Minnesota’s MOST Kind and Helpful bankruptcy law firm by going now to www.lifebacklaw.com.  You will be so happy you did.