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Social Security Disability Insurance and Bankruptcy in Killeen Texas

by Erin B. Shank

Financial troubles can occur for a wide variety of reasons, one of those being an accident or illness that leaves you unable to work. If you find yourself unable to work in Texas you may qualify for Social Security Disability Insurance, or “SSDI”. While qualifying for SSDI may allow you to cover your necessary expenses, it will not likely provide you with the same income you had when you were working. As a result, you may still wish to consider filing a bankruptcy case. You may be concerned about how Social Security Disability Insurance and bankruptcy will work together. Once you understand a bit more about bankruptcy and how SSDI benefits are treated in a bankruptcy case, your concerns should be alleviated, paving the way to begin your journey back to financial stability by filing a Chapter 7 bankruptcy case.

If you elect to file a Chapter 7 bankruptcy, you will be required to file documents, under the penalty of perjury, listing all of your assets and all of your creditors. Your SSDI payments are exempt and will not be taken by a bankruptcy trustee. Those payments are also not required to be used to force you to repay your creditors in a Chapter 13 Bankruptcy case.

Social security disability insurance benefits are exempt under federal law in all fifty states. The Texas and federal bankruptcy exemptions are very generous. Therefore, most Chapter 7 debtors are able to exempt (keep) all of their assets, including their  home, vehicles, contents of their home, retirement plans, tools of their trade, life insurance and the funds in their savings and checking accounts.

If you are an SSDI recipient, you should be sure to consult with an experienced Texas bankruptcy attorney as a part of your financial planning. Filing a bankruptcy should enable you to eliminate your debts and retain your assets, thereby giving you peace of mind and the ability to concentrate on your physical and medical issues.

erin b shank

I have been practicing exclusively bankruptcy law in Texas for almost 40 years. Unlike most other law firms, my firm is exclusively dedicated to helping individuals and small businesses find a way out of their financial difficulties through the use of our nation’s bankruptcy laws.

Associations & Awards
  • Client Companion Award | Erin B. Shank
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  • Preeminent Award | Erin B. Shank
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  • state bar of texas
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