You may feel lucky enough to receive Social Security Disability Insurance (SSDI) benefits to pay for your day-to-day expenses, such as food, medical bills, housing, and utilities. However, these monthly payments may not come close to covering the outstanding personal debts you owe to creditors. You likely do not have other income streams to help pay off these debts, either. In a case like this, you may be carefully considering a Chapter 7 bankruptcy declaration. Well, read on to discover whether you qualify for bankruptcy while receiving monthly SSDI benefits and how a seasoned attorney in SSDI eligibility in New Jersey, at The Law Offices of Sheryl Gandel Mazur, can help you navigate the rough waters of your current financial situation.
Do I qualify for bankruptcy if I receive monthly SSDI benefits?
First of all, to qualify for Chapter 7 bankruptcy, you must pass the means tests. The test holds that a debtor’s monthly income must fall below the average monthly income for their area. As of April 1, 2024, in the state of New Jersey, the average monthly incomes read as follows:
- For a single earner: $6,925.
- For a household of two: $8,369.
- For a household of three: $10,853.
- For a household of four or more: $13,117 per month plus $9,900 per year for each additional person.
For this reason alone, you may worry that your SSDI benefits, combined with your other income streams, put you over the edge of the average monthly income. Well, you may rest easier knowing that your SSDI benefits may be considered an asset under the United States Bankruptcy Code, rather than a source of income. This is to say that your monthly benefits may not affect your eligibility to file a bankruptcy petition.
How do I protect my SSDI benefits during my bankruptcy proceedings?
Things can get tricky, though, if you deposit your monthly SSDI benefits payments into the same account as your other income. This is because your Chapter 7 bankruptcy trustee may have the right to access the funds in your account to pay off your outstanding creditors.
So before they take this step, you must do everything to prove that a certain amount of money in your account came from your SSDI benefits. This may be accomplished by providing them with a copy of your benefit verification letter, a copy or your most recent online Social Security statement, and more. But to avoid this confusion altogether, it may be easier if you open a separate account designated solely for these monthly payments.
Do not wait. Retain the services of a competent attorney in SSDI eligibility in New Jersey, from The Law Offices of Sheryl Gandel Mazur, today. We look forward to hearing from you and working on your case soon.
