Will Filing Chapter 7 Bankruptcy Affect Social Security Benefits?

August 11th, 2014 | by RON BELL

Financial difficulties is not new to many Americans during the last decade. In many situations where there is financial hardships in the home, there is also illness in the home. Individuals who are injured or have health problems cannot always work as much as they would like to. In many cases the individual cannot work at all and has filed for Social Security disability benefits and been denied. Filing for a Social Security Appeal must be done immediately and not after the deadline SSA provides to you.

Ron Bell Social Security disability lawyers can assist you with filing a Social Security Appeal; although, your debt continues to grow while pending the outcome. Bills continue to come in the mail and creditors still can sue you in court for money owed to them. Some individuals may inquire about filing either Chapter 7 or Chapter 13 bankruptcy. Contacting a bankruptcy lawyer in New Mexico is essential to understand the effects filing bankruptcy will have on your credit report and future.

Chapter 7 bankruptcy wipes out any unsecured debts owed; however, the bankruptcy trustee may then seize and sell any property valued above the federal and state allowances. Secured debts are handled differently, in that a debtor may decide to allow the repossession of the property or continue to make payments on the debt and possibly keep the property. Chapter 13 allows the debtor to eliminate debt, but only individuals with adequate income can file Chapter 13. This is due to the requirement that the debtor pay back the debts owed in one lump sum each month to the bankruptcy trustee. The trustee then keeps detailed records and pays each creditor a percentage of that monthly lump sum for up to five years, depending on the case.

Social Security payments are not taken into consideration when determining eligibility for Chapter 7 bankruptcy. Furthermore, the Bankruptcy Provision of the US Code allows debtors the right to collect Social Security payments and are considered exempt.

Ron Bell Social Security attorneys can provide legal advice and a free consultation to apply for SSI or Veterans disability benefits. Contact our Albuquerque Social Security lawyers today and begin making positive steps in your financial future.

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