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Bankruptcy

To understand the benefits of social benefits to a debtor, you need to look it at bankruptcy. In order to receive social security benefits in a bank account before filing your bankruptcy, you need to avoid mixed funds with non-Social Security money. The exemption and protection of social security is dictated by the federal law and the bankruptcy courts. Therefore you should know that you are entitled to ongoing Social Security. Protection is provided to social security benefits applied before you file for bankruptcy.

It will be difficult to be expected from any of the funds if you mix these benefits with non-social security, I is easy to lose the entire funds if you mix social security benefits with other funds. The trustee assigned and how lenient your he or she can be will determine if you will receive social security benefits. The social benefit account should not be combined with other funds.
If funds are separate from social security benefits the trustee will be assured that they are safe. If you make a mistake of depositing even a single dollar in the account the trustee will argue that you cannot separate Social security funds from other funds. Wildcard or cash-on-hand exemption are some of the ways to keep your social security benefits protected. The federal law also protects lump sum payment received from social security prior to filing bankruptcy.

Nevertheless the same standards also apply when it comes to mixed funds. By commingling lump-sum social security with other funds the account is no longer unprotected. The likelihood of the trustee to argue that the lump sum is in the bankruptcy estate will be determined by how big the potential payoff is. A trustee trying to prove that commingled funds are unprotected is more likely to gain. Another reason as to why you need to keep your social security benefits separate is when proving to the court that the account is protected.

By any chance a person find himself bankrupt the trustee will take his properties and the creditor will be unable to act for their debts. A debt is what connects the creditor with the trustee. As long as this is accepted by the trustee, payments can be made to the creditor via dividends. Discharge from bankruptcy means that the person is released from all proven debts. The only exception is when the debt was obtained through fraud. Social security debts are in the same category as other debts in bankruptcy. Recovery action needs to be stopped when social security debt person is declared bankrupt. Some of the ways that cannot be used in repayment by way of deduction are social security payment, garnishee, legal proceedings among others. Any time a debtor is declared bankrupt, money paid towards him should be returned unless the trusty need to do the repayment.

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