It might seem like you will lose everything if you file bankruptcy, but really there are protections in place meant to help protect you and your assets. Including for your money and personal property. But will you lose your social security if you file bankruptcy?
What is an exemption? Florida bankruptcy exemptions protect items of personal property, retirement accounts, and wages. Some of the bankruptcy exemptions you may use to protect your property in a Chapter 7 or Chapter 13 case include:
$1,000 for personal property.
$1,000 for a motor vehicle.
An unlimited amount of home equity
$4000 in other things if you don't own a home
Wages in a checking account for head of household
Is Social Security exempt?
Federal law protects social security payments from creditors. Both social security income and disability, are exempt from garnishment under Section 207 of the Social Security Act. These benefits retain their exemption after being deposited in the debtor beneficiary’s accounts. By law, you cannot even threaten garnishment of social security income.
As with most things financial, there are exceptions to federal protection of social security benefits. The U.S. Government may garnish up to 15% of social security checks to collect money owed to the federal government, to enforce a court award of alimony or child support. Also, the Internal Revenue Service may levy upon social security payments to collect on a tax debt.
What to do with your social security money
It is best to keep your social security income separate from your other money. This is the best way to track the source of your spending. If you have comingled your funds, there are options still available. As with most things in bankruptcy, consulting an attorney is the best option to prevent complications. Most attorneys offer a free consult.