You need to file for bankruptcy because you’re in a bad situation with your finances. However, you also receive Social Security, and you’re afraid that you’re going to lose your monthly checks to your creditors. Before filing for bankruptcy, it’s important to find out more information on how it could impact your Social Security payments.
Will I Lose My Benefits If I File?
If you file for bankruptcy in Washington, you will not lose your Social Security benefits. They are exempt. You will, however, have to list it as property when you file for bankruptcy, just like you’d list any real estate you own, cash you have, or jewelry in your possession.
Avoiding Commingling Your Property
It’s crucial to keep a separate bank account for your Social Security payments. You can’t tell your bankruptcy trustee that a portion of your bank account balance is your Social Security money, because they may not believe you. When you commingle your funds, you could end up losing your payments. With a separate account, you can show that your deposits are exclusively coming from Social Security checks.
What If You’ve Already Commingled Funds?
If you have already commingled your funds and filed for bankruptcy, the state of Washington also has a wildcard exemption you can use. The exemption is for $3,000 of any personal property, but not more than $500 in bank deposits or $1,500 in cash. But if you have consumer debt, you can have $2,000 in your bank accounts. To avoid having to use the wildcard exemption, open a separate account for your Social Security payments before you file for bankruptcy.
Working With Schott Law
If you need help with your Social Security benefits, Schott Law is here for you. Maggie Schott is an SSDI & SSI lawyer serving Washington and Idaho. Contact us now at (509) 328-5789 to start your application.