The Art of Mastering Lawyers
Social Security Guide
To understand the benefits of social benefits to a debtor, you need to look it at bankruptcy. 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. It is the responsibility of social security administration and bankruptcy courts to protect the social security benefits. So, you should understand that the trustee has no right deny you the ongoing social security benefits. Protection is provided to social security benefits applied before you file for bankruptcy.
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. It very important that you have your social security benefits in an account that you don’t use to deposit other funds.
If funds are separate from social security benefits the trustee will be assured that they are safe. When you deposit other funds to social benefit account, the trustee will conclude that the account is not protected. When you mix social security benefits with other accounts, you have the option of protecting it using bankruptcy exemption. The Retroactive can also be protected by the federal law.
However, they are too subjected to social security standards. Trustees will argue that the funds are not protected if you deposit lump sum security payment to other funds account. The likelihood of the trustee to argue that the lump sum is in the bankruptcy estate will be determined by how big the potential payoff is. A trustee trying to prove that commingled funds are unprotected is more likely to gain. 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. As long as this is accepted by the trustee, payments can be made to the creditor via dividends. A person who is discharged from bankruptcy is free from all debts charged on him. The only exception is when the debt was obtained through fraud. The treatment of social security debts is similar to the other debts in bankruptcy. The entire recovery action is stopped immediately a person who is who has a social security debt is declared bankrupt. Once a debtor is declared bankrupt, it is not possible to do repayment through deduction from the social payment. Any time a debtor is declared bankrupt, money paid towards him should be returned unless the trusty need to do the repayment.