31 Dec Denial Of Social Security Often Leads To Bankruptcy
Most people don’t realize that they can go bankrupt waiting for social security disability to kick in to help with their living expenses. People think that if something happens that disables them, that they will be able to receive disability income to live on. In a recent New York Times article on social security denial, the problems leading to many bankruptcy filings are revealed.
The period between a person realizing that they need to apply for social security and when they actually file can mean months without a paycheck. When they finally do apply, they wait for a decision which most often is denied. Many people give up, not realizing that it often takes several applications before they get their approval for payment, but it often takes the intervention of an attorney and several years before getting the payments due.
During the period that people are “holding on”, waiting for help, many people will use credit cards to help cover necessities thinking that they will pay them off once the disability payments are approved. By the time the approval comes, with fees and interest the debt is often overwhelming and there is no way for the individual to pay it off. Additionally, the family finds that money coming in is needed for medical expenses and other necessary items like food and heat. The ongoing social security disability payments aren’t usually enough to cover those items each month, let alone pay off past debt.
In North Carolina and many other places, social security benefits are protected from creditors therefore it may be beneficial to speak to an experienced attorney to see if funds that a disabled person is waiting for can be protected if a Chapter 7 or Chapter 13 bankruptcy case is filed to discharge debts that may have accumulated.
According to the article:
RALEIGH, N.C. Steadily lengthening delays in the resolution of Social Security disability claims have left hundreds of thousands of people in a kind of purgatory, now waiting as long as three years for a decision.
But in the meantime, more and more people have lost their homes, declared bankruptcy or even died while awaiting an appeals hearing, say lawyers representing claimants and officials of the Social Security Administration, which administers disability benefits for those judged unable to work or who face terminal illness.
A bankruptcy case filing might help someone protect the social security disability from creditors so it can be used for the true purpose: helping a sick or disabled person cover basic living expenses.
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