Baltimore Social Security Disability Lawyer: Declaring BankruptcyMarch 11, 2017
In today’s economy, many people struggle every day to put food on the table and pay for basic living expenses. For people who live on a fixed income, this can be particularly difficult, especially if the amount they bring in never seems to be enough. Individuals who are living on disability benefits are all too familiar with this problem. When the monthly benefit does not cover the cost of living, but a disability prevents the person from being able to work to earn extra income, these individuals often find themselves in an unfortunate financial situation with looming bills and unpaid debt.
According to the Social Security Administration, approximately nine million people receive Social Security disability benefits. The average Social Security disability payment is just over $1,200 per month. When you consider the cost of a mortgage payment or rent, food, car insurance, and other expenses, that money can get used up very quickly. When the money runs out, it is not uncommon for disability recipients to resort to using credit cards to pay for things they cannot afford. Unfortunately, when the bills stack up and they are unable to make the minimum payments on their credit card bill, they are often forced to declare bankruptcy.
How Does Bankruptcy Impact Disability Benefits?
Fortunately, creditors are prohibited by law from garnishing your disability benefits to pay back debts. In most cases, when an individual files for bankruptcy, they file Chapter 7, which is designed to eliminate unsecured debts, including credit cards, medical bills, and personal loans. Eligibility for Chapter 7 is based on your annual income and the size of your household. If you make too much money, you may not qualify. However, if you receive disability payments, filing for bankruptcy is much simpler because you are not required to include your monthly Social Security benefits in the income calculations.
Ongoing Versus Lump Sum Payments
If you receive your Social Security disability benefits on an ongoing, monthly basis, the federal government does not allow debtors to garnish that money. If you received your benefit in a single lump sum payment, it will most likely be exempt and protected in bankruptcy proceedings. However, you will need to trace the money in order to prove that it was a Social Security disability payment in order to protect it from a Chapter 7 trustee. Some exceptions apply to this rule, including where you live, but an experienced Social Security disability lawyer will be able to answer your questions and ensure that you continue to receive the benefits to which you are entitled.
Baltimore Social Security Disability Lawyers at LeViness, Tolzman & Hamilton Help Clients With Bankruptcy Issues
If you receive Social Security disability benefits, but you are considering filing for bankruptcy because of accumulated unpaid debts, you are not alone. The compassionate, experienced Baltimore Social Security disability lawyers at LeViness, Tolzman & Hamilton will work closely with you to ensure that your benefits are secured and that your legal rights are protected. To schedule a free consultation, call us today at 800-547-4LAW (4529) or contact us online.
Our offices are located in Baltimore, Columbia, Glen Burnie, and Towson, allowing us to represent clients throughout Maryland, including those in Anne Arundel County, Carroll County, Harford County, Howard County, Montgomery County, Maryland’s Western Counties, Southern Maryland, and the Eastern Shore, as well as the communities of Catonsville, Essex, Halethorpe, Middle River, Rosedale, Gwynn Oak, Brooklandville, Dundalk, Pikesville, Parkville, Nottingham, Windsor Mill, Lutherville, Timonium, Sparrows Point, Ridgewood, and Elkridge.