Robert J. Adams and Associates
Social Security, Unemployment, Worker's Compensation and Bankruptcy
There are 2 types of questions that people receiving benefits ask
- Can I file Bankruptcy, either Chapter 7 or Chapter 13?
- Should I file a Bankruptcy?
As to the first question, receiving benefits such as Social Security, Unemployment, or Worker’s Compensation the answer is ”YES.” Receiving benefits is not a deterrent to filing a case.
Should you? That is more of an individual decision.
First, you should know: private creditors cannot garnishment social security benefits. Neither can they garnishment Unemployment benefits or your Worker’s Compensation payments.
Also, if you have modest amounts in a bank your money is safe.
Based on experience here are some reasons folks have filed
- Clients are just tired of being harassed by creditors;
- Some others believe that after they file Chapter 7 they can rebuild their credit (and they are correct);
- Some people receiving benefits might be able to finance a purchase of a car after filing Chapter 7;
- Their short term situation might be the ideal time to file Chapter 7 or Chapter 13.
Let me explain why this could be the best time to file a case.
You had a very good job with a good income and you expect to start working again in a short while.
The single client had been making over $100,000 per year. Her employer closed shop. The client fully expects to get a new job in a few months.
One gentleman told me his employer cut his income in half. He fully expects to go back to his prior income in a few months.
The same is true if one needs file Chapter 13. With current income, Chapter 13 monthly payments will likely be lower than when full time employed.