Can I File Bankruptcy if My Only Income is Social Security?

by Peter Orville, Binghamton Bankruptcy Lawyer

September 29, 2009

If your only income is Social Security or SSD, you can file bankruptcy. But you may not have to.

If you do not plan on going back to work, you may not need to file bankruptcy because you are considered to be “judgment proof”. That means that while your creditors can sue you and obtain a judgment, they may not be able to collect anything from you.

Creditors generally cannot recoup any money from your social security income. You should determine, however, if you own any other real or personal property that creditors could get their hands on. It is best to review your situation with an experienced consumer bankruptcy attorney.

Even if you are judgment proof, you may still want to file a Chapter 7 or Chapter 13 bankruptcy. If you have secured debt, such as a mortgage or car payment, and you are behind on your payments, Chapter 13 may give you the ability to bring these secured debts current, while still getting rid of your credit card or medical debt.

If you have some real or personal property that is not considered “exempt” in your district, you can protect that property from creditors by filing a Chapter 13 and paying at least a portion of your unsecured debt.

There are some social security recipients, who are judgment proof and have no non-exempt assets, but still want to file Chapter 7 bankruptcy. The primary reason is that they want to stop the phone calls, bills and demand letters.

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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.

Last modified: March 8, 2013