What happens if I need to file Chapter 7 and I just found out I’m getting a large back pay check RROM SSDI or SSI because I am disabled? 12 Answers as of August 19, 2014

Can I file a Chapter 7 even though I have a large sum of back pay disability in a savings account?

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If the money is coming from social security it should not be part of the bankruptcy estate so that you should be able to keep it.
Answer Applies to: Minnesota
Replied: 8/19/2014
Stephens Gourley & Bywater | David A. Stephens
Disability payments from SSI are generally exempt in bankruptcy in Nevada.
Answer Applies to: Nevada
Replied: 8/13/2014
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The SSI is exempt. Money from a private plan is not, but might be under your state exemptions. You should see a local lawyer.
Answer Applies to: California
Replied: 8/13/2014
GARCIA & GONZALES, P.C. | Richard N. Gonzales
Yes. Social Security money is exempt from creditors, including the Chapter 7 Trustee.
Answer Applies to: Colorado
Replied: 8/13/2014
Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
As a general rule, payments from Social Security cannot be taken by the trustee to pay creditors but you must keep the funds completely from any other money. Talk to a bankruptcy attorney to get personal advice for your situation.
Answer Applies to: Arkansas
Replied: 8/13/2014
    Barnhart Law Office
    Barnhart Law Office | Bruce C Barnhart
    Certain disability payments and awards are exempt. As long as the funds are segregated and not commingled with other assets. If you are considering filing bankruptcy, you should speak with a bankruptcy specialist prior to receiving the funds.
    Answer Applies to: Nebraska
    Replied: 8/13/2014
    Ronald K. Nims LLC | Ronald K. Nims
    Social Security Disability Income (SSDI) payments are exempt assets in a Chapter 7 bankruptcy. That includes any SSDI funds which you are holding in a bank account - provided that you can prove the money came from SSDI. For example, if you put a $10,000 SSDI lump sum payment in a bank account in January, then in February you spent $4,000 and in March you put in $2,000 which is not exempt. You'd have $8,000 in the bank ($10,000 - $4,000 + $2,000 = $8,000) of which $6,000 would be exempt as SSDI (the $10,000 SSDI deposit minus the $4,000 spent).
    Answer Applies to: Ohio
    Replied: 8/13/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    The social security would be entirely exempt if you qualify for the federal exemptions, or if you use the Oregon exemptions, the first $7500 would be exempt. Of course, you need to be sure you can document the source of the funds if they are already deposited. Also be sure not to pay off any creditors, relatives or friends with any of it prior to filing your bankruptcy. Such payments can be challenged and recovered by the trustee from the recipient or from you. If you spend any of it, it must be for current living expenses and not old debts.
    Answer Applies to: Oregon
    Replied: 8/13/2014
    Thomas Vogele & Associates, APC | Thomas A. Vogele
    You're in luck because disability income, such as SSI or private disability insurance, is exempt in a bankruptcy. Check with your attorney first, but you should be able to file and exempt your disability "back pay."
    Answer Applies to: California
    Replied: 8/12/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    All social security benefits are exempt from bankruptcy court administration. Amend your bankruptcy case to include these assets and exempt them on Schedule C.
    Answer Applies to: Nevada
    Replied: 8/12/2014
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    IN J: If you can show that all the funds are SSDI, or SSI, then yes.
    Answer Applies to: New Jersey
    Replied: 8/12/2014
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    The funds in the account will be potentially available to the bankruptcy court to satisfy your creditors, see an attorney before you make a move.
    Answer Applies to: Michigan
    Replied: 8/12/2014
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