Yes, the Bankruptcy Code does not prevent someone from filing bankruptcy if they only receive Social Security benefits. As you may already be aware from prior blog posts or browsing our website, generally there are two different bankruptcy options for individuals: Chapter 13 and Chapter 7.
Chapter 13 is for individuals who have the ability to pay some or all of their debts back over a three to five year period though the chapter 13 trustee. To qualify to file a successful Chapter 13, an individual must prove that they can afford their Chapter 13 payments, regardless of where they receive their income. In order for your Chapter 13 Plan to be confirmed (approved by the court), the plan must be feasible, meaning that you have the ability to make your future Chapter 13 payments.
Chapter 7 is for an individual looking to receive a fresh start within four to six months from the date of filing. The fees and costs associated with a Chapter 7 are paid prior to filing and all of our Bond & Botes offices offer payment arrangements to help you afford these costs.
If you just received Social Security benefits, it is important for you to know that Federal Law already protects your benefits from garnishment, regardless of you filing for bankruptcy. This means that:
- a creditor cannot garnish your Social Security check, and/or
- garnish a checking or savings account where ONLY your Social Security benefits are being deposited to that account.
If you receive Social Security benefits and have assets (house, car, etc.) or are being harassed by creditors and just need some peace of mind, contact a local Bond & Botes office today for your free consultation to determine whether filing bankruptcy is the right choice for you.
Mary Pool is a shareholder of the Bond & Botes Law Offices in Montgomery and Opelika, Alabama. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Faulkner University’s Jones School of Law. She has represented thousands of clients over her more than 11 years working in the bankruptcy field. Read her full bio here.