Avoid These Disastrous Mistakes To Keep Your Social Security Safe
Your Social Security is owed to you after you have worked and paid into the system. It provides a safeguard so that you have some financial support after you retire or are no longer able to work. You should be able to count on it.
However, if you file for bankruptcy or if you are simply in over your head in debt, your creditors may have a right to seize your assets to satisfy your debts, and your Social Security may be in the crosshairs. Even though federal law exempts your Social Security from being claimed by creditors, there is a chance that this income can get mixed up with your other assets and still get taken. Here are a couple of mistakes you should avoid in order to keep your Social Security safe:
Commingling Your Funds
One of the most common reasons that it can be so hard to protect your Social Security funds is that you may not be able to prove which of your funds comes from Social Security. If you are depositing that money into the same bank account where you deposit other income, alimony, unemployment benefits, gifts, or other money, you have no way to show which money is Social Security and which isn’t. You are depositing and spending money from that account, so you can’t just show Social Security deposits as proof. How can you say how much you spent was from your Social Security and how much you spent came from other sources?
The best way to protect your Social Security money is to deposit it into an account designated solely for those funds. Open up a new account, and only put your Social Security money into that account. Then be careful not to open up any lines of credit with that bank.
Failing to Use Direct Deposit
Set up direct deposit for your Social Security checks. Doing so will ensure that these deposits are protected for up to two months. If you don’t take this step, a creditor can send a Writ of Garnishment to your bank and those funds can be taken. Sure, you can file a Claim of Exemption later, but that process can take a while, and in the meantime, you can lose a lot of money.
When your Social Security is direct deposited into your bank, your bank automatically knows what it is and that it is protected. Any Writ of Garnishment would be denied. Without that direct deposit, the bank only knows where the money is coming from because you tell it – and, again, that process can case you to lose a lot of money. You may eventually get your money back, but it can take weeks or months, and you can spend a lot of time and money in the process. Save yourself a lo of grief and set up the direct deposit to protect your money.
Social Security benefits are something we all work to get, and you should not fear that your creditors will take that hard-earned money from you because you are having problems with debt. Make sure you take the proper steps to protect this and any other exempt money that you receive, such as veteran’s benefits, military annuities, Social Security Disability Income, student assistance, and more. If you are struggling with debt and are facing Writs of Garnishment, consider talking to a Gilber bankruptcy attorney about long-lasting debt relief. If you have filed for bankruptcy already, talk to your bankruptcy lawyer in Gilbert about steps you can take to protect your exempt income or other assets.
Call Gilbert Bankruptcy Lawyers if you are struggling with debt and want to put a stop to wage garnishments, harassing phone calls, and other debt collection measures. Our experienced bankruptcy attorneys will carefully review your finances and help you understand whether bankruptcy may be the right choice for you for long-lasting debt relief. We represent clients in both Chapter 7 bankruptcy and Chapter 13 bankruptcy. During a free consultation, we will thoroughly analyze your debts and finances to help you understand how to get maximum debt relief while also meeting your goals, such as keeping your personal property. Call us in Gilbert today to schedule a consultation with one of our experienced bankruptcy attorneys.