To understand the benefits of social benefits to a debtor, you need to look it at bankruptcy. However, one experience a lot of trouble if they have social security benefits prior to filing for bankruptcy. It is the responsibility of social security administration and bankruptcy courts to protect the social security benefits. Therefore you should know that you are entitled to ongoing Social Security. By filing your bankruptcy, you are entitled to social security benefits.
But if you mix social security benefits with non-social security funds, you are likely not to be exempted any fund. It is not recommended to mic social security funds with other funds. How lenient your trustee will be in looking at your social security benefits will determine if you are protected or not. It is advised that you don’t deposit money in the same account that you use for your social benefits.
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. From the trustee perspective, your account is unprotected if you deposit any money to your social security benefits account. 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.
Nevertheless the same standards also apply when it comes to mixed funds. The trustee will conclude that the funds are unprotected if you are lump sum security and social security have been commingled. The trustee will claim that the lump sum belongs to the bankruptcy estate if the potential payoff is bigger. A trustee trying to prove that commingled funds are unprotected is more likely to gain. Keeping your accounts separate will help you in court in the event that you want to prove the account’s protection.
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. Discharge from bankruptcy means that the person is released from all proven debts. The only exception is when the debt was obtained through fraud. Social security debts are in the same category as other debts in bankruptcy. Recovery action needs to be stopped when social security debt person is declared bankrupt. Once a debtor is declared bankrupt, it is not possible to do repayment through deduction from the social payment. A debtor should always be repaid if money is paid towards him after he has been declared bankrupt.