Social Security Benefits and Chapter 13 Bankruptcy

A 10th Circuit Court of appeals case just a few weeks ago resulted in a big victory for debtors who are receiving social security benefits and need to file for Chapter 13 bankruptcy protection. A district court in the circuit first found that social security income does not need to be included as projected disposable income and second that a debtor who failed to include said social security income did not act in bad faith. The trustee in the case appealed the decision to the 10th Circuit Court of Appeals (the federal appeals court for Utah and other mountain west states) and the court upheld the decision. As a result, if you have social security income, you no longer need to worry about this playing a factor to your detriment in a Chapter 13 bankruptcy, at least in Utah.

Chapter 13 Bankruptcy in Utah

The ruling mentioned above provides even greater incentive for some individuals to seek out Chapter 13 bankruptcy as alternate to straight Chapter 7 discharge. Many times, people with significant assets and property that they don’t wish to lose file for Chapter 13. Now that social security income will not be considered towards your total income, the hope is that the same precedent will be applied to other types of benefits thus even further opening the door to those viewing Chapter 13 as an option.

Salt Lake City Utah Bankruptcy Lawyer

Whether it is Chapter 13 or Chapter 7 bankruptcy, a Salt Lake City Utah Bankruptcy Lawyer in our office can get you on the road to financial freedom. We stay tuned on the latest developments on the law to help give our clients the best possible outcome to their bankruptcy process. The trustee’s office doesn’t always win on these issues as evident above. We will fight for our interests and help give you the best path to getting back on your feet.