Social Security benefits aren't considered as income when you file for bankruptcy, and may not be taken to repay your debt.

Social Security income also can't be used to determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy in a means test. Plus, you can still apply to receive these benefits while you're going through bankruptcy.

If a creditor tries to garnish your Social Security payments, you should challenge them in court. Both the law and repeated court rulings show that your Social Security benefits are protected exemptions. (There are some specific exceptions to keep in mind: the government, for instance, can take from Social Security to pay back federally guaranteed loans.)

A scenario that might affect your Social Security payments, however, is if you are self-employed and bankruptcy causes you to go out of business. Social Security retirement benefits are based upon how many years you are employed and pay Social Security taxes on your income. If you are employed for less than 10 years before you reach retirement age, you won’t be eligible for Social Security retirement benefits.

However, this is a rare problem. You could also offset this problem by delaying the receipt of your benefits until you are older — up to age 70.

Social Security disability benefits (SSDI) are also protected during bankruptcy. Filing for bankruptcy shouldn't affect your ability to apply for these benefits either.

Castle Law Office has been handling bankruptcies for Kansas City clients from more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or click here to email us and schedule your free consultation.