Will your bankruptcy affect your benefits of having a Social Security benefits? Bankruptcy is a legal inability to pay debts. Social Security has a benefit that has been or will be paid to the debtor is safe. If you have filed for bankruptcy or have received a large amount of payment after you have filed your Social Security benefits then you might face some big trouble if you have mixed the funds you have with non-Social Security money. Social security benefits are exempt property.
The Federal law has clearly and obviously stated, and has expressed all details in a clear and comprehensible manner that the Social Security benefits are an exemption, the Social Security Administration, and as well as the bankruptcy courts has the position to protect the funds. The Social Security Administration and such funds are protected. The social benefits you have applied prior to your bankruptcy is still valid and will not be taken by the trustee.
Prior to the date, the individual has filed bankruptcy, the benefits you have applied is protected. You must be careful with your money from the benefits with the non-Social Security funds. Some trustee might argue with them if you commingle with. If you commingle with the Social Security benefits with other people’s money. You should not risk losing the Social Security benefits exemption for the entire one whole month.
If your Social Security benefits are commingled with other funds, you can protect it by using a bankruptcy exemption. It can be the cash on hand exemption or the wildcard exemption.
Some cases of bankruptcy have trustees who show tolerance in dealing with some misbehaviors. The Social Security Administration recommends that one should maintain his or her social benefits and it should be kept separate from all other funds deposited.
The person in debt must list all of the properties he or she owns in his or her bankruptcy petition. It does not matter where the money came from, once you have received your social security funds the status changes from income to property.
These are some of the properties you have to disclose:
- If you are receiving a cold cash or a hard cash.
- The money you invest, the retirement and bank accounts.
- Real property, the property might be a primary home, rentals or vacation property.
- Hobby and sports equipment
- Jewelry and anything you own.
If you have decided to file for bankruptcy, open the account that you have solely use for your social security benefits. Consider also to commingle funds with your account before filling bankruptcy by using them to pay for all of his necessities of life.
If you have already filed a bankruptcy or cannot wait to exhaust the commingled funds.
We do not have the authority to reprimand the choices you have made. Other institution have wildcard extension. No, the extension. The wild card that allows you to protect any property you have wished.
If you have bankruptcy questions we suggest contacting Tax Attorney Dean Edward Hines