When you live on a fixed income, it can sometimes be difficult to get by. A sudden or unexpected expense may make you wonder how you’ll pay your bills. You may turn to your credit cards to cover what you owe.
If you end up having too much debt on those credit cards, in medical bills or in other places, then you may find it hard to make ends meet. Your income won’t be changing, so how can you get out of that debt?
You may want to consider bankruptcy if you’re living on a fixed income
Filing bankruptcy on a fixed income is possible. For example, if you’re living on Social Security benefits and have medical expenses that aren’t covered by Medicaid, you might add them to a credit card. If those debts are overwhelming, then your attorney may be able to help you get those debts discharged through Chapter 7 or 13 bankruptcy.
The good news about filing for bankruptcy while you’re on Social Security, in particular, is that Social Security income is usually protected against bankruptcy. However, you should keep in mind that any benefits that are in a bank account prior to your bankruptcy may be open to being used to pay back what you owe, depending on how that money was mixed with other funds.
Are Social Security benefits exempted from bankruptcy?
Federally, the law does state that Social Security benefits are exempted from bankruptcy. If you mixed those with other funds, that doesn’t mean you’ll lose them all. You may still be able to use a wildcard exemption to protect a certain portion of your income and savings.
Living on a fixed income is not easy, and you may run into trouble in the future if changes aren’t made. If you have to seek bankruptcy, your attorney may also be able to talk to you about other options for improving your finances as you move forward into the future. With the right help, it’s possible to minimize the impact of debts on your fixed income, so you can get back to a normal lifestyle.