Q: Is previously received SS money (direct deposit) excluded from Bankruptcy Estate in Chapter 7?
I am 73, literally own almost nothing, and my only income is Social Security. By living extremely frugally, and spending what other savings I had, I've been able to accumulate over $5,000 of SS payments in a bank account. The SS money has never been commingled with other money.
If I file Chapter 7, many online sources such as NOLO have told me that my SS account is exempt property, as long as I can prove the money is ONLY from SS, which I can. Something to do with the SS law itself (407, I think?) and a US Supreme Court Case - Lewis v Siegal. (?)
Yet when I talked with a local BK attorney, he said "It's not", but acknowledged never having come across something like this.
Can you please clear this up for me? And IF it is exempt, but an unusual situation, how do I go about finding someone local that I can trust knows what he or she is doing around this?
A:
Generally, Social Security benefits are exempt from execution, levy, attachment, garnishment, or another legal process, or from the operation of any bankruptcy or insolvency law. The exceptions are that benefits are subject: (1) to the authority of the Secretary of the Treasury to make levies for the collection of delinquent Federal taxes and under certain circumstances delinquent child support payments; and (2) to garnishment or similar legal process brought by an individual to enforce a child support or alimony obligation.
Money that can be traced to Social Security is either exempt or some cases say it never becomes property of the estate.
You need a second opinion. You can search for a local bankruptcy attorney in your area using the National Association of Consumer Bankruptcy Attorneys website. (www.nacba.org) or you can search for an attorney using the Justia "Find a Lawyer" link at the top of this page.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
