As a rule, your Social Security retirement benefits should not be able to be attached by your creditors. The purpose of Social Security is to provide elder citizens with a floor, a minimum that they can use to support themselves in their old age. The amount of Social Security income you receive is based on how much you earned during the best 35 years of your working life. Your benefits are generally protected because the government recognizes how difficult it is for seniors to earn a living due to health issues. Social Security is not designed to make you wealthy. It is designed to make you secure.

Steps to protect your SS benefits:

1. Use online bank deposits of your checks

There are however, some steps, you should take to help protect your Social Security retirement benefits from creditors. The first step is to open a bank account and have your Social Security payments be paid online directly into that account. That way it is clear when your Social Security money is being paid and how much is being paid.

Normally, creditors can attach or garnish your bank account if you owe them money. But federal regulations protect Social Security retirement benefits. Your bank should not authorize the creditor’s attempt to attach or garnish your account – if it is clear to the bank that the creditor is seeking to take your Social Security money.

If you manage all your income through one bank account, the bank may not understand the source of the money in the account. Just because the bank isn’t immediately certain as to where the money in your account comes from doesn’t mean the creditor can get it. Uncertainty means that the bank may or will freeze your account until it can be determined if your money comes from Social Security or someplace else.

The bank cannot freeze your last two Social Security payments in any event. This is a recent government regulation to make sure you always have, at least, two Social Security payments. For example, if your benefit payments are $1,250 a month, then if you have $2,500 or less in your bank, the bank can’t freeze that money.

2. Use separate accounts

The second step is to have a second bank account for your other income and to pay your bills. If you combine or commingle your Social Security benefits with any other income you receive and any bills you pay, then the bank may say that they’re really not clear/certain that the money in your account comes just from your Social Security checks. Using one account for your Social Security and another account for your other finances helps to make clear to the bank what is going on – that the money in your Social Security bank account is definitely due to your monthly Social Security payments and nothing else.

There are exceptions to the benefit protection rule. Priority is given to creditors, however, if you owe that creditor taxes or child support, in which case specialized rules apply

If the bank does freeze your account, the bank must give you prompt notice. The notice must detail the basis for freezing your account such as your right to hire a lawyer and the identity of the creditor.

Don’t let creditors take advantage of you. Consumers and anyone who owes debt do have rights. To understand your debtor’s rights, an experienced Connecticut Bankruptcy can help.

NO. Many people worry that they will jeopardize their immigration status if they file for bankruptcy. This is incorrect. Your immigration status is not affected in any way by filing for bankruptcy.

NO. You can be employed, have some money in the bank and own personal property and a house in many cases. Bankruptcy is intended to give you a fresh start, but you don’t have to be at rock bottom to take advantage of its benefits.

NO. Most people keep their cars and most, or all, of their other property as well. The specific answer depends on the value of what you own but your attorney will be able to answer those questions for you easily.

The Beckett Law firm does not have a “one size fits all” philosophy. We will charge you a fair price based on the time we believe we will spend on your case in order to bring it to a successful completion. During the initial consult, the attorney will explore any unusual issues or complexities which may impact the fee.  However, our fees are competitive with area firms.

Someone with one or more small businesses will probably pay more than someone who works at a regular job and has a personal residence.  Someone with a personal residence will probably pay more than someone who does not own a home and rents. An older person, whose sole income is social security, may pay a very low fee for a bankruptcy filing. Every client’s situation is unique and we charge our fees accordingly.

NO. All of our bankruptcy fees are flat rates. We will never bill you for phone calls or postage or any of the other annoying little expenses.

Yes. A “typical” or “average” Chapter 7 case will probably cost somewhere between $1,500-$2,800. A chapter 13 bankruptcy is likely to be between $3,000 – $5,000, and a Chapter 11 bankruptcy may be $20,000 or $30,000 or more. However, these are extremely rough estimates and the only way to know for sure is to come in and meet with us.

Debt Settlement is probably the most common alternative, but be careful of the tax implications. Settlement involves negotiating with your creditors so you pay them less than the actual amount due. This may be done on your own or through one of the many agencies that proliferate online.

Well, of course it does work for some people. However, in our experience, it is usually tried for a short time and then most often people come in to file bankruptcy after all. In 2005, a report issued by the National Consumer Law Center entitled An Investigation of Debt Settlement Companies: An Unsettling Business for Consumers found that very few consumers complete these program.

This is a classic reason to file Chapter 13, which will let you catch up and pay the past due amount over as long as 5 years (in 60 equal installments). Other options may be a Special Forbearance where your lender provides for a temporary reduction or suspension of your payments, a Mortgage Modification can be used to roll the past due amount into the loan and extend the term to give you longer to pay.

If you don’t want to keep the house, then you may want to explore a Short Sale where the bank takes less than the full amount due, and let’s you off the hook for the shortfall, or a Deed-In-Lieu Of Foreclosure which is when you essentially just “give back” the house to the bank and they waive the balance on your mortgage. You could end up with a 1099C, though, so proceed cautiously and consult with an attorney before committing to either of these scenarios.

A successful Chapter 7 bankruptcy wipes debt from:

Credit cards
Personal loans
Credit tax debts
Parking tickets
Store cards
Checking account overdrafts
Medical and dental bills
Social Security and unemployment overpayments

A successful Chapter 7 bankruptcy wipes debt from:

Most taxes
Debts obtained through fraud or deception
Most student loans
Child support and alimony
Most court-ordered fines and criminal restitution
Debts for personal injuries caused by driving while intoxicated or taking drugs

Some very well known and well respected people have filed bankruptcy – like you, they just needed a fresh start. Most did quite well afterwards.

President Abraham Lincoln

Author Mark Twain

Automobile Manufacturer Henry Ford

Hall of Fame quarterback Johnny Unitas

Hollywood director Francis Ford Coppola

Television personality Larry King

Actor Mickey Rooney

Actor Burt Reynolds

Actress Kim Basinger

Entertainer Jerry Lee Lewis

Entertainer Wayne Newton Fifty Cent

Entertainer M.C. Hammer

Entertainer Toni Braxton

Continental Airlines

United Airlines

US Airways (twice)