Your disability checks are likely safe from the bankruptcy court. In some cases, you may need to take additional action to protect a lump sum back pay payment or your previous disability deposits still in your account.
Understanding How Bankruptcy Works When You Receive Benefits
When you file for bankruptcy, what happens to your assets differs based on several factors. If you file for Chapter 13, your assets are not at-risk because this action simply restructures your debt to make it easier to pay off each month.
Chapter 7, however, is a “liquidation bankruptcy.” This allows the bankruptcy court to take and sell many of your assets to cover debts. This means you may lose your car and/or house. However, even after filing for Chapter 7 bankruptcy, you should be able to keep enough to live on.
Social Security Disability Insurance Benefits
Your SSDI check is likely not in jeopardy. Federal law limits the bankruptcy court’s ability to take these funds, assuming you can prove they came from your disability check. However, in some cases, the bankruptcy court will claim you do not need the entirety of your check to meet your basic needs.
Supplemental Security Income Benefits
Federal law also protects SSI benefits. Creditors cannot go after your SSI benefits in any way. In addition, the asset limits for SSI are extremely low. This means that if you qualify for SSI, most of your assets will be necessary for making ends meet. Because the court must leave you enough to live on, most of your assets will most likely not be available to the bankruptcy court.
Take the Steps to Protect Your Benefits
Based on federal laws, your disability benefits are most likely safe from your bankruptcy action. However, some states require you to take specific steps to declare these funds exempt from bankruptcy. Your bankruptcy lawyer can explain this to you.
In some cases, you may also need to take action to prove the money in your bank account came from a lump sum back pay payment or previous SSDI and/or SSI deposits.
We Can Help You Get and Keep Social Security Disability
At Berger and Green, our team of disability attorneys knows what it takes to get and keep Social Security disability payments. We can review your claim before you file it with the Social Security Administration, file your appeal if Social Security denies your application, and fight for your benefits if an eligibility review puts them in jeopardy.
In some cases, our injury lawyers may even be able to help you file a personal injury lawsuit to hold the at-fault party liable for your impairment financially responsible. This may be one way to get the money you need without having to file for bankruptcy. This may be an option if you recently suffered an injury in a negligence accident and this injury left you disabled.
Call a Pittsburgh Social Security Disability Attorney Today
The disability lawyers at Berger and Green understand how the Social Security disability process works. We can answer your questions about filing for benefits, appealing a denial, eligibility reviews, and other concerns you may have about SSDI and SSI. If you face potentially losing the benefits you need, we will fight for your check.
Call our Pittsburgh office today at 412-661-1400 for a complimentary consultation with a member of our disability team.