Will social security disability be taken away in a bankruptcy? 10 Answers as of February 23, 2011My friend should have her final Social Security Disability hearing in about 12 mo., and if approved will get about $12k lump sum + monthly disability. She is unable to work for 5 yrs; she and her dh have $50k in cc debt (not counting mortgage). She can't divorce him until SS disability money comes. Will that be taken if they declare bankruptcy? IMHO, most of her health issues would cease if she was out of that horrible marriage, but she can't leave yet - no job, no money and no health insurance if she left. Thank you for your assistance.
Gresham Family & Bankruptcy Law | Lillian Suelzle Watson
While social security benefits is usually exempt in bankruptcy, it may be considered a marital asset. Then there is a specific limit on the amount of the exemption. It will be important to consider the various debts and who is responsible for these debts in the divorce. Does the divorce come first or after a bankruptcy? Your friend should see a lawyer experienced in both with a domestic relations and a bankruptcy background, as there are too many questions to be answered in a brief e-mail. The question is in the details.
Answer Applies to: Oregon
Carballo Law Offices | Tony E. Carballo
There is an exemption for disability benefits that would exempt all the funds she is likely to get from Social Security. She should keep those funds in a separate account. To do things properly she should have a lawyer represent her in the bankruptcy case to make sure things are done properly.
Answer Applies to: California