Can I keep receiving Social Security after Bankruptcy in California?

If you are considering filing bankruptcy, contact us today for a free consultation. For more answers to frequently asked questions, please see our massive resource here: Los Angeles Bankruptcy Lawyer.

Can I keep receiving Social Security after bankruptcy?

If you’re thinking of filing for bankruptcy, and you’re worried about getting your social security after going bankrupt, there’s little to worry about. The general rule is that Social Security payments are exempt from bankruptcy proceedings unless you’ve commingled those with other funds. If you have commingled them, future payments shouldn’t be affected, so long as you open a separate account and arrange to have those payments deposited there. Federal law specifically exempts Social Security payments from bankruptcy, and the bankruptcy courts recognize and protect that exemption.

Prior Social Security

Any Social Security benefits that a person might have received before having filed for bankruptcy are also protected, but the same warning applies about commingling. You’ll want to be able to show the bankruptcy trustee which funds are from Social Security and which funds, if any, aren’t derived from that source. If you can’t make that distinction, there’s a chance that you could lose all of the commingled money.

Some people have their Social Security benefits deposited into a segregated, dedicated account. When you’ve done that, you can account for every penny of income derived from Social Security that’s protected from creditors.

Lump sum payments

Sometimes people receive lump sum payments from Social Security that operate as a retroactive payment that might be thousands and thousands of dollars. That money is protected by the same laws that protect monthly Social Security payments, but it’s also subject to the same commingling rules.

There’s a right way and a wrong way about having Social Security payments deposited. It’s really quite simple. The left hand’s income goes into the left hand’s accounts, and the right hand’s Social Security payments go into another separate account that isn’t commingled with anything. Many people who are receiving Social Security who are petitioning for bankruptcy have issues dealing with left hand and right hand deposits. Don’t let the problem mushroom when you can easily be in control of it.

Contact a Los Angeles Bankruptcy Lawyer today

Contact us by phone or email if you’re thinking about bankruptcy. We don’t want to see a penny of your Social Security affected either.

We assist people with bankruptcy in the following areas and counties of California:

  • Los Angeles County
  • San Fernando Valley
  • Orange County
  • San Bernardino County
  • Riverside County
  • Ventura County
  • Santa Barbara County

Sherman Oaks, CA

Law Offices of Steers & Associates
5900 Sepulveda Blvd., Suite 270
Sherman Oaks, CA 91411
Phone: (800) 824-5416
Mo, Tu, We, Th, Fr: 9:00am - 5:30pm

Los Angeles, CA

Law Offices of Steers & Associates
445 S. Figueroa Street, Suite 2700
Los Angeles, CA 90071
Phone: (800) 824-5416
Mo, Tu, We, Th, Fr: 9:00am - 5:30pm

Lancaster, CA

Law Offices of Steers & Associates
1805 West Avenue K
Lancaster, CA 93534
Phone: (800) 824-5416
Mo, Tu, We, Th, Fr: 9:00am - 5:30pm

Riverside, CA

Law Offices of Steers & Associates
11801 Pierce Street, Suite 200
Riverside, CA 92505
Phone: (800) 824-5416
Mo, Tu, We, Th, Fr: 9:00am - 5:30pm

Long Beach, CA

Law Offices of Steers & Associates
111 West Ocean Blvd., Suite 400
Long Beach, CA 90802
Phone: (800) 824-5416
Mo, Tu, We, Th, Fr: 9:00am - 5:30pm

Whittier, CA

Now serving Whittier and the surrounding communities
Phone: (562) 320-8684
Mo, Tu, We, Th, Fr: 9:00am – 5:30pm