Social Security and Bankruptcy
With many older Americans turning to personal bankruptcy, Social Security is a frequent concern, with some wondering how benefits effect income requirements.
The decision to file bankruptcy may be a difficult one, but you don't have to face it alone. You can speak with an attorney about your options, including filing bankruptcy.
Connecting with an attorney in your area is easy. Simply fill out the free case evaluation form below to arrange a free, no-obligation consultation with a bankruptcy lawyer near you.
Social Security & the Chapter 7 Bankruptcy Means Test
To qualify for Chapter 7 bankruptcy, debtors must pass a qualification test, known as the means test. This is designed to make sure that those who file for Chapter 7 truly need such bankruptcy protection, and is a calculation of income as compared with the median income of similar-sized households in your state.
The Chapter 7 bankruptcy means test is complex, but it essentially adds up wages, tips, bonuses, commissions, child support income, and numerous other income sources. This collective figure is then compared to the median income in the state that you live in, and it is adjusted based on family size.
A filer's Social Security benefits, and other benefits under the Social Security Act, are generally not included when calculating income during the Chapter 7 bankruptcy means test. However, state bankruptcy laws can vary, so you can ask a bankruptcy attorney in your state how bankruptcy laws would apply to your Social Security benefits.
Those who are considering bankruptcy may find Chapter 7 bankruptcy protection appealing because of the debt discharge that comes with it. The discharge, as opposed to a Chapter 13 bankruptcy repayment plan, may eliminate the obligation to repay certain debts in as little as a few months.
Discuss Bankruptcy With a Bankruptcy Attorney
If you have questions about the bankruptcy process, you may want to talk to one of our sponsoring bankruptcy lawyers. Simply fill out the free case evaluation form below to connect with a local bankruptcy attorney today and learn more about your rights under the U.S. bankruptcy laws.