When the financial hardship of debt strain becomes unmanageable, filing for bankruptcy may be an option for you. Filing bankruptcy is an opportunity for a fresh start. A simple phone call with a bankruptcy attorney will give you insight into your personal case. An experienced bankruptcy lawyer will offer a free case evaluation and answer all of your questions with specific information on your case.
There are different types of bankruptcy depending on your situation. As a general rule, it is always best to seek legal advice when considering bankruptcy. Common questions can actually be answered in a free consultation to help you make a determination. It is a good idea to research local team with good reviews. Blog posts like this are a great place to start and can help you formulate questions to ask. The use of this website also provides useful information.
A common misconception is, if you file a bankruptcy, you will lose everything. But really, in a bankruptcy filing, the bankruptcy court has protection in place meant to help protect you and your valuable assets which include your money and personal property. But will you lose your social security if you file bankruptcy? Yet another reason to bring your bankruptcy case to an experienced bankruptcy attorney.
Will I lose everything if I file bankruptcy
What is an exemption? In short, it is a bankruptcy protection. There is personal property exemption and nonexempt property which will become the property of the bankruptcy estate. Each exemption amount is a Florida bankruptcy exemption to protect items of personal property, retirement accounts, and wages. They are exempt assets. Some of the bankruptcy exemptions you may use to protect your property in Chapter 7 or Chapter 13 case include:
- $1,000 for personal property.
- $1,000 for a motor vehicle.
- An unlimited amount of home equity
- $4000 in other things if you don’t own a home
- Wages in a checking account for head of household
When you prepare to file a petition, you will include all of your income, secured creditors, and unsecured creditors, as well as real and personal property. You must also pass the means test. You will need to show a disposable income. This is where an attorney can help make sure you are filing the correct type of bankruptcy. The bankruptcy trustee reviews all of your assets following bankruptcy law at your meeting of the creditors.
Is Social Security exempt?
When you file bankruptcy, you include things in your bankruptcy petition such as personal property, Federal law protects social security payments from creditors. In bankruptcy, you have exempt social security benefits and disability. They are exempt from garnishment under Section 207 of the Social Security Act. These benefits retain their exemption after being deposited in the debtor beneficiary’s accounts. By law, you cannot even threaten garnishment of social security income.
As with most things financial, there are exceptions to federal protection of social security benefits. The U.S. Government may garnish up to 15% of social security checks to collect money owed to the federal government, to enforce a court award of alimony or child support. Also, the Internal Revenue Service may levy social security payments to collect on a tax debt.
What to do with your social security money
It is best to keep your social security income separate from your other money. This is the best way to track the source of your spending. If you have joined your funds, there are options still available. As with most things in bankruptcy, consulting an attorney is the best option to prevent complications. Most team offer a free consultation.
Filing bankruptcy can be a way to manage when finances overtake you. Bank garnishments, house foreclosures, mounting credit card debt.