These days, most Americans use credit cards in 1 form or a different and carry a balance each and every month. Every person has been affected by the financial meltdown. People today living off social security rewards are no exception. If you are in more than your head and in a lot of debt, and obtain social security advantages (SSB), you might be questioning if receiving SSB will affect your capability to file a bankruptcy case. The answer depends on your particular monetary scenario.
If you presently do not own any actual estate and the only revenue you obtain is social security revenue, you are technically judgment proof for the reason that your SSB are exempt from collection activities, such as garnishments and levies. If this is your scenario, you may well not need to have to file for bankruptcy. Even if your creditors file a lawsuit against you and get a judgment, they can't levy against your SSB. The most essential factor is to produce certain you can prove that every thing in your bank account is derived from SSB and not commingled with other sources of earnings. It ought to not be too challenging to prove all the cash you have is from SSB if that is your only source of revenue.
If you do have actual estate or other assets that have to have to be protected and you have other sources of earnings in addition to your social security advantages, most Folks will will need to total the Statement of Present Monthly Earnings and Calculation (usually referred to as the "Signifies Test") to identify no matter if you qualify for a Chapter 7 bankruptcy or no matter if you must file a Chapter 13 bankruptcy rather. The Signifies test determines what your typical disposable revenue is based on your typical earnings minus allowable deductions. If you have any disposable earnings left more than it most most likely Signifies that you must be filing a Chapter 13 bankruptcy and paying back to them what you can afford to pay every month. Social security positive aspects are not deemed earnings for Implies test purposes. That Implies that any revenue you get from the Social Security workplace does not require to be calculated into this monthly equation.
Having said that, even although social security advantages are not deemed earnings for Signifies test purposes, there is a second test to identify no matter if you qualify for Chapter 7 or Chapter 13 bankruptcy. This test depends on what your monthly household earnings and costs are. This is related to the Implies test in that it takes your revenue and subtracts your expenditures, On the other hand when the Indicates test calculates the typical revenue minus allowable expenditures based on IRS standards to identify your disposable earnings, this test just takes what your genuine and future monthly household earnings is and subtracts your real costs to generate your monthly spending budget (Schedule I and J in your bankruptcy petition). Regardless of whether your social security rewards are regarded as "revenue" depends on what jurisdiction you reside in. Here in the Northern District of California, social security rewards are included in your household earnings. If based on your monthly spending budget you have disposable earnings, On the other hand, it is a sign that you may perhaps will need to file for a Chapter 13 bankruptcy.
Bankruptcy laws can be confusing, specifically while attempting to differentiate earnings or expenditures on the Signifies test and earnings for your Schedules I and J. If you have any concerns, it is a fine notion to consult with an knowledgeable bankruptcy lawyer.
The Law Offices of Lin & Wood is a Bay Location and California consumer bankruptcy firm filing Chapter 7 and Chapter 13 situations for People today in need to have. Take a look at us web based to acquire Fremont bankruptcy or a Union City bankruptcy attorney committed to delivering individual service for a reasonable fee.
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