Social Security Guide
The chapter of bankruptcy provides an explanation of social security benefits to a debtor. In order to receive social security benefits in a bank account before filing your bankruptcy, you need to avoid mixed funds with non-Social Security money. The exemption and protection of social security is dictated by the federal law and the bankruptcy courts. It is important to note that you have the right to enjoy social security benefits and should not be taken from you. By filing your bankruptcy, you are entitled to social security benefits.
Nevertheless, the trustee might claim that you should not be exempted from any funds if you commingle non-Social Security funds with these benefits. I is easy to lose the entire funds if you mix social security benefits with other funds. Each case of social security benefits will depend on the trustee assigned to oversee the matter. The social benefit account should not be combined with other funds.
When social security benefits are separately kept from other funds, it the debtor will easily show the trustee that every dollar comes from the Social Security Administration. If you make a mistake of depositing even a single dollar in the account the trustee will argue that you cannot separate Social security funds from other funds. Bankruptcy exemption such as cash on hand can help you to social funds commingle with other funds. The Retroactive can also be protected by the federal law.
Nevertheless the same standards also apply when it comes to mixed funds. By commingling lump-sum social security with other funds the account is no longer unprotected. The trustee will claim that the lump sum belongs to the bankruptcy estate if the potential payoff is bigger. The trustee representing the interest of your creditor is likely to gain if social security payment is commingled with other funds. Another reason as to why you need to keep your social security benefits separate is when proving to the court that the account is protected.
By being bankrupt, the bankruptcy trustee takes all the creditors property except for some personal items. It is possible for a creditor to claim proof with the trustee. In the event that the debtors asset is liquidated, the creditor is paid by dividends. A person who is discharged from bankruptcy is free from all debts charged on him. An exception for this is when a debt was incurred by fraud. All debts in bankruptcy including social treatment are treated in the same way. Recovery action needs to be stopped when social security debt person is declared bankrupt. Some of the ways that cannot be used in repayment by way of deduction are social security payment, garnishee, legal proceedings among others. Any time a debtor is declared bankrupt, money paid towards him should be returned unless the trusty need to do the repayment.