Are Social Security Benefits Part of Bankruptcy in New York City?

For many people faced with bankruptcy in New York City their social security benefits are often the only income they have.  A qualified attorney can help protect these social security benefits, keeping them out of the hands of your creditors, in almost all Chapter 7 bankruptcy cases.  The federal government understands the importance of keeping social security benefits out of bankruptcy proceedings and off the table for the trustee.  This provides some natural protection for your benefits, but you need to go about exempting all of your assets in a precise way to get the most out of your bankruptcy.

In New York City your social security benefits will not be included as part of the bankruptcy means test.  Any unemployment benefits or workers comp will be included in the means test calculation, but social security benefits will not.  For people collecting social security benefits that are also still earning an income this could be the difference in passing the means test.  Your social security benefits will still be disclosed to the court after filing however, because all of your income is listed and accounted for in your bankruptcy petition.  “Schedule I” lists all of your income including social security, and “Schedule J” shows how this money is spent every month.   If you have any family members living in your household all of their income also needs to be accounted for on the bankruptcy schedules including any social security benefits they might be receiving.  At the end of the day the bankruptcy court will learn of any social security benefits coming into your household, but the benefits won’t necessarily be on the table for your creditors.

Bankruptcy filings from individuals that rely on social security benefits to survive are actually quite common.  People living on a fixed budget sometimes have to let unexpected expenses go unpaid when they need to pay the rent and keep food on the table.  The good news is that if you decide to file bankruptcy then your social security benefits will be protected along with your other assets including bank accounts, retirement accounts and personal property items.

Filing for any bankruptcy requires the assistance of a qualified bankruptcy attorney in New York City.  It is a complicated process that can be very unforgiving if gone about in the wrong way.  Protecting social security benefits is one of the many things your attorney will consider when advising you on your best bankruptcy options.  If you live in New York City and have questions about protecting your social security benefits in bankruptcy please contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free bankruptcy consultation.  We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 9/31/16.

This article is intended for educational purposes only.  By reading this no attorney-client privilege has been created.