After working a lifetime, it is nice to retire with financial security. For many, part of their retirement is social security payments from the government, so keeping these funds safe is of paramount importance. If you are receiving social security payments, but experiencing financial difficulty, you may be wondering types of actions put your social security payments at risk. Specifically, you may have questions as to whether your social security is safe if you file for bankruptcy.
Bankruptcy is a way to get rid of debt that you cannot pay, but it is not a blank check to stop paying debts and keep property or to keep certain funds that are not otherwise exempt. With social security, you can rest easy knowing it will be outside the reach of your creditors if you file bankruptcy. But there are some exceptions and it is important to have an understanding of a few scenarios before you file a bankruptcy case. For example:
• If you received funds from the Social Security Administration prior to filing bankruptcy, those funds are safe as long as they have not been commingled with other funds.
• If you expect to receive social security payments after you file a bankruptcy case, you will need to keep those funds separate from other income and document the separation for the benefit of the trustee assigned to your bankruptcy case. Doing so will make it clear from the outset the source of your funds, and prevent inquiry concerning whether your money is safe.
• If you have commingled social security with other monies, such that it is impossible to determine the source of your money, the bankruptcy court may attempt to seize your money regardless of the source.
We understand the need to maintain an income stream, especially if you have the need to file for bankruptcy, and can help ensure your social security remains untouched. Issues surrounding social security payments and how that money is impacted by filing for bankruptcy can become complex, and should be given the special attention needed to keep those monies safe and out of the reach of your creditors. We know how to pinpoint potential issues that might jeopardize your social security, and head them off before they become problematic.
For more information about how to manage debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.