How Do Social Security Benefits Affect My Bankruptcy Case?

These days, most Americans use credit cards in one form or another and carry a balance each month. Everyone has been affected by the economic meltdown. People living off social security benefits are no exception. If you are in over your head and in a lot of debt, and receive social security benefits (SSB), you may be wondering if receiving SSB will affect your ability to file a bankruptcy case. The answer depends on your specific financial situation.

If you currently do not own any real estate and the only income you receive is social security income, you are technically judgment proof because your SSB are exempt from collection activities, such as garnishments and levies. If this is your situation, you may not need to file for bankruptcy. Even if your creditors file a lawsuit against you and obtain a judgment, they cannot levy against your SSB. The most important thing is to make sure you can prove that everything in your bank account is derived from SSB and not commingled with other sources of income. It should not be too difficult to prove all the money you have is from SSB if that is your only source of income.

If you do have real estate or other assets that need to be protected and you have other sources of income in addition to your social security benefits, most people will need to complete the Statement of Current Monthly Income and Calculation (commonly referred to as the "Means Test") to determine whether you qualify for a Chapter 7 bankruptcy or whether you should file a Chapter 13 bankruptcy instead. The means test determines what your average disposable income is based on your average income minus allowable deductions. If you have any disposable income left over it most likely means that you should be filing a Chapter 13 bankruptcy and paying back to them what you can afford to pay each month. Social security benefits are not considered income for means test purposes. That means that any income you receive from the Social Security office does not need to be calculated into this monthly equation.

However, even though social security benefits are not considered income for means test purposes, there is a second test to determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy. This test depends on what your monthly household income and expenses are. This is similar to the means test in that it takes your income and subtracts your expenses, but while the means test calculates the average income minus allowable expenses based on IRS standards to determine your disposable income, this test simply takes what your actual and future monthly household income is and subtracts your actual expenses to create your monthly budget (Schedule I and J in your bankruptcy petition). Whether your social security benefits are considered "income" depends on what jurisdiction you live in. Here in the Northern District of California, social security benefits are included in your household income. If based on your monthly budget you have disposable income, then again, it is a sign that you may need to file for a Chapter 13 bankruptcy.

Money Management Techniques That Will Help You Towards a Secure Financial Future

Life is hard at the best of times but it is doubly difficult to meet ends meet at the present time. What with the credit crunch, the downturn in the global economies and job cuts in almost all the industries. We all want to live the life of our dreams by having a better house to live in, drive the car of our dreams and pay our bills without having concerns about our bank balance at the end of the month. Most of these things are possible with changing our lifestyle and better money management.

Nowadays every bit of information that we need is at our fingertips because of the internet and this is also true for money management. There are hundreds of sites offering you advice and information on how to become debt free with money saving tips. There are money management sites which cater to your financial planning with lots of advice and information on how to manage your money more efficiently.

It is no surprise that money issues seem to hit the younger generation the hardest. This is probably because the instant culture that affects young people and very poor money management habits. Young adults want to have things that they often fail to realize are out of their budgetary reach. One thing that we can attribute this to is the ease of getting instant credit. Another reason for this is that most young people want to live their life at the level of their parents but they fail to realize that it has taken their parents twenty or thirty years to get where they are.

Money management techniques and money saving tips have become quite popular in the recent months. More and more people begin to realize that to move towards a debt free future, you need to start saving money in all the areas that you possibly can. One place people are turning to achieve this is the internet, where you can find many organizations that provide sound financial advice and practical info on how to start achieving all your financial goals, understand everything from financial planning to getting out of debt, to managing your money wisely, to saving for your future.

If you are some one who finds themselves in a financial predicament then there are many organizations out there waiting to help you. Consumer credit counseling services offer confidential budget, credit, and housing advice in addition to debt management, financial education, and bankruptcy counseling. Money saving tips and money management advice are available online from a number of sources. All you have to do is to reach out and help is at hand that can help you on your way to a better financial future. You will have to make sacrifices on the way but when you look back, you will realize that it was worth all that effort that you put in.