Social Security, Unemployment, Worker’s Comp 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.

EXAMPLES

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.

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