Category Archives: Bankruptcy and Disability

Social Security and Protection from Creditors

When you fall behind in paying your creditors the money you owe them, your creditors have various powers to address the situation.  Your creditors can contact you in an attempt to receive payment, report your delinquent (or non-existent) payments to the three credit bureaus, potentially file a lawsuit against you to receive a judgment for the money owed, or sell the bad debt to a collection agency (who likewise can file a lawsuit against you for the money owed).  With a judgment against you in hand, whether it is the original creditor or a collection agency, they can potentially garnish your wages, place liens on your property, or take other legal steps to obtain the money you own to them.

Protection of Social Security Benefits

Many people, especially those who are receiving the benefits because they are disabled, rely on Social Security income to maintain a minimum standard of living.  Therefore, when it comes to Social Security Benefits and creditors, it is important to understand what protection the law gives people related to these benefits outside of declaring bankruptcy.

Section 207 of the Social Security Act reads as follows:

The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

What the wording noted above means is that creditors cannot seize Social Security benefits through a levy against your property, garnishment against your wages, or any other legal method.  Section 207 provides this protection from creditors over Social Security payments regardless of why you are receiving those payments, whether the payments relate to retirement, disability, or as a death benefit to the surviving spouse.

Other Points to Remember

Section 207 of the Social Security Act may only protect your Social Security benefits from creditors if you can prove that a given balance of funds is from Social Security payments.  If you co-mingle Social Security payments with other account balances or other income streams, it may create confusion in the eyes of the law and increase the chances that a creditor can seize those funds in spite of the protection offered by Section 207.  Therefore, you would be wise to have your Social Security payments sent to a bank account used solely for those Social Security payments, so there is no confusion from a legal perspective on the source of the funds.

In addition, remember that the protection the Social Security Act provides for Social Security benefits against creditors does not extend to the government or the Internal Revenue Service (IRS).  You still have to pay any applicable taxes on your Social Security benefit payments, and if you fail to do so, the IRS can potentially seize your Social Security funds to satisfy the tax owed.

Hiring a Bankruptcy Lawyer

Keep in mind that the information above is general in nature and should not be considered legal advice.  If you want legal assistance, you should speak with a bankruptcy attorney.  Even if you are not considering declaring bankruptcy at this time, a bankruptcy attorney can advise you on what protection the law provides for different types of property in your state.  And if filing bankruptcy becomes a necessary option, a bankruptcy attorney can help you take the right steps to complete the bankruptcy properly.

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Divorce and Implications of Bankruptcy

Divorce can be a messy process.  Aside from the emotional and relationship issues that going through a divorce creates, it can result in a number of financial issues and questions that you need to address as well.  And if you throw creditors into the mix because one or both spouses are behind on their bills and you believe bankruptcy is an option that you should pursue, it can complicate the divorce proceedings even further.

So if you are considering divorce and believe you may need to file bankruptcy as well, following are some of the key points you should consider.

Need for Bankruptcy

When someone has financial issues, bankruptcy is a term that can come to mind quickly, perhaps too quickly.  While bankruptcy can be a powerful and at times necessary tool to get a fresh start from a financial standpoint, it also has a long-term negative impact on your credit.

Therefore, you should keep in mind that there are alternatives that you should consider before considering bankruptcy.  Although there are a number of organizations that advertise they will help people get out of debt who are actually in the business just to make a quick buck, there are legitimate companies and not-for-profit groups that you can discuss your situation with to help evaluate what all your options are.

While bankruptcy may be the way you need to go in the end, you should take time to consider other options first.

Types of Bankruptcy

If bankruptcy is necessary, keep in mind that there are two primary types of bankruptcy for individuals.  Chapter 7 bankruptcy provides for the elimination of most types of debt.  Chapter 13 bankruptcy allows a person to reorganize their debt through use of a payment plan.

bankruptcy attorney can help you evaluate which type of bankruptcy is the right option for you given your situation, considering the types of debt you have and the implications the bankruptcy may have on the divorce proceedings.

Shared Debt

If you and your spouse have debt that is in both of your names, keep in mind that if only one of you files bankruptcy, the other spouse will often still be responsible for paying the debt.  While you declaring bankruptcy may keep creditors from pursuing you to collect the money owed, the creditors can (and very likely will) pursue your spouse for the money.

How are Disability Payments affected by Bankruptcy?

One of the strains in life that often leads to divorce is finances, when there just is not enough income to pay your creditors.  This may be especially true if one spouse cannot work and is receiving disability payments such as Social Security.

But remember that if you are receiving Social Security benefits because of disability and you need to file bankruptcy, Congress has passed laws that protect those disability payments from Social Security from being at risk in the bankruptcy, because disability payments were deemed too necessary to someone in need maintaining a minimum standard of living.  While there are a number of factors you should consider before filing for bankruptcy, you should not let fear that bankruptcy may take away your Social Security benefits be one of those factors.

Hiring a Bankruptcy Attorney

Remember the information above is general in nature and should not be considered legal advice.  As noted at the start of this article, either divorce or bankruptcy on their own can be complicated, but when coupled together, they can be especially difficult to navigate.  Therefore, if you are dealing with both of these situations, you should speak with a bankruptcy attorney who is familiar with the bankruptcy laws of your state and can evaluate your individual and unique situation in light of these laws.  A bankruptcy attorney can help make sure your property is listed correctly so that your Social Security benefits and any other assets you have are viewed in the best possible light by the bankruptcy court.

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Disease Can Cause More than a Bankruptcy


English: Exercise from a physiotherapy program...

Image via Wikipedia

Juvenile Disc generation, a part of the Lumbar Scheuermann’s disease, is a disease that starts in juveniles causing spinal parts in their Lumbar region to have pits in the discs of their spine.

In latter years of the Scheuermann’s disease, when the discs begin to deteriorate, the condition can be painful and debilitating. Up until that time, and the time varies from patient to patient, Scheuermann’s disease may go undetected because pain is not really associated with the condition until the discs begin to deteriorate and rub against the spinal nerve.

Under some circumstances, Scheuermann’s disease can deteriorate the discs of the spine so that the person with the disease might eventually become disabled.

When the disease has caused your spine to deteriorate to the point you have unbearable pain, there are only about 3 options left for you in today’s medical world to help you alleviate the pain.

Option One is a Conservative Approach.

You can push through pain until the disk is completely degenerated. Once that happens there will be no more pain. Conservative treatments of Scheuermann’s disease can help you push through the pain and may include one or combinations of the following:

  1. Medicines
  2. Chiropractic or osteopathic manipulations
  3. Epidural injections
  4. TENS units
  5. Physical therapy (exercises, stretching)

Options Two and Three are Radical Options.

Radical options for Scheuermann’s disease are invasive in nature. They are normally not recommended for the vast majority who has this disease, but there have been abnormal cases reported where the deterioration has called for radical options.

  1. Radical option two for curing the symptoms of Scheuermann’s disease is surgical spinal fusion of the disc involved. Here, the surgeon scrapes out the disc material, places pins and a plate where the disc was and allows the bone to fuse.

One of the downsides to spinal fusion is that it is very invasive and has the potential of limiting your skeletal movements when completed. Recovery time from the operation can be long and painful. Normal movement varies from person to person.

  1. Radical option three for curing the symptoms of Scheuermann’s disease is a relatively new surgical procedure called spinal disc replacement. Here, a surgeon uses not so invasive a technique going through the abdomen and replaces the disc with a specialized disc.

The downside to disc replacement is that many insurance companies will not cover the cost because it is such a new procedure here in the United States. Recovery time is much faster. Skeletal and body movement are usually not hindered.

Scheuermann’s disease can disable a person. When you are disabled, your disability can cause the inability to work. Combine the facts you may be disabled and cannot work with the fact you have large medical bills, and you have a recipe for bankruptcy. Since the disease can cause you to be both disabled and bankrupt, disease can cause more than a bankruptcy.

If you are suffering from any kind of disease that has disabled you and caused you to lose your job or face bankruptcy, contact us here and we will help you find a disability or bankruptcy lawyer in your area. Our attorneys can help answer any questions you might have about bankruptcy or disability.


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