Even with the supplemental income you receive through the Social Security Disability Insurance (SSDI) benefits program, this may not be enough to make ends meet every month. With building debts, you may be looking more closely at a bankruptcy filing. However, you may wonder whether this is counterproductive, in that it could potentially steal your monthly SSDI benefits away from you. Well, please continue reading to learn whether SSDI benefits are protected during bankruptcy and how an experienced New Jersey SSDI benefits lawyer at The Law Offices of Sheryl Gandel Mazur can help you maintain this critical income source at this difficult time.
Are SSDI benefits protected during my bankruptcy proceedings?
If you are considering a Chapter 7 consumer bankruptcy filing, you should know that your eligibility is first determined by passing the means test. This test takes your monthly income and compares it to the median monthly income of individuals with your same household size in your same state. For example, as of 2025, the median monthly incomes for a one-person, two-person, three-person, and four-person household in New Jersey are approximately $7,250, $9,005, $10,860, and $13,123, respectively. With this, you may worry that your monthly SSDI benefits will tip you over the edge of this amount, hindering you from proceeding any further with a bankruptcy declaration.
Importantly, though, you may rest a little easier knowing that federal law does not let your monthly SSDI benefits count towards your calculated monthly income. This is essentially because these benefits are categorized as an exempt asset in your bankruptcy proceedings, in which your appointed bankruptcy trustee is not allowed to touch and subsequently distribute them amongst your outstanding creditors. In fact, the Social Security Administration (SSA) is told to ignore any court orders to funnel your monthly payouts to your bankruptcy trustee.
Do I need to declare bankruptcy if I collect SSDI benefits?
To reemphasize, your creditors are barred from pursuing collection activities against your monthly SSDI benefits during your bankruptcy proceedings. But you must understand that this also applies outside of bankruptcy. This is to say that you may not need to declare bankruptcy to get yourself out of your financial crisis. Rather, you may contemplate alternatives to bankruptcy, such as debt management plans, debt consolidations, and debt settlements, with the help of a hired financial advisor or legal representative.
This may be especially relevant if you do not have any other assets besides your SSDI benefits that are considered exempt and eligible for similar protections. That is, it may be too drastic a measure to sacrifice many of your hard-earned assets, such as your secondary real estate properties, secondary vehicles, investment accounts (excluding your retirement accounts), high-value collectibles, and more.
We understand just how overwhelming all of this can be for you. So, if you have any remaining questions, please consult with a skilled New Jersey SSDI benefits lawyer. The team at The Law Offices of Sheryl Gandel Mazur is willing and able to provide you with legal assistance in any capacity.
