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Belleville Bankruptcy And Social Security Blog

Breaking common bankruptcy myths

Even if they've never declared bankruptcy, people have often heard myths and rumors about the process. This can be dangerous. Buying into a rumor that isn't factual could cause problems if you ever decide to file on your own.

With that in mind, here are a few myths to watch out for:

Increase in personal needs money still not seen for some

The residents of The Clayton Residential Home, which is located in Lincoln Park, Illinois, are not happy. This facility houses mentally-ill individuals and is paid for out of these individuals' $735 (approximate) Social Security Disability (SSD) checks each month. The individuals receive between $30 and $60 of that money to spend on their personal needs, such as toothpaste, deodorant and soap. This is generally the only money these individuals get each month.

In July, the new Illinois budget and an increase in income tax was passed by the legislature. Three facilities have not received the increase, which affects approximately 400 people. Three other facilities are paying their residents the higher amount, according to a survey by ONE Northside.

Things to keep in mind when applying for SSDI

If you intend to file for Social Security disability benefits in the St. Louis area, it is important for you to prepare yourself for the process. You might not realize it, but many first-time filers often have to file appeals to get their benefits because they receive denials on their initial applications. 

Although you may feel you have a strong claim, understand that the application process is a very stringent one. Your claim must pass the five-step evaluation process disability examiners use to qualify claims for benefits. To better prepare for the possibility that your claim may not be approved, here is what you should know about the SSDI appeals process. 

Should you pay off debt if you're filing for bankruptcy?

You have enough debt that you're going to file for bankruptcy. In many ways, it seems like you would want to pay off as much of that debt as possible, but experts actually advise against it.

First and foremost, you won't likely "save" any credit lines. For example, maybe you have three credit cards. You decide to try to pay one off so that, after you file, you'll still have that card. Unfortunately, the credit card company is probably not going to allow that, and they'll just shut down your account.

Does the homestead exemption always protect your home?

In Illinois, the homestead exemption in a Chapter 7 bankruptcy case is there to make sure that bankruptcy doesn't leave you homeless. The goal is to pay off the debt, not to make you destitute.

That said, there are limits to the exemption. The max for one person is $15,000 and it's doubled to $30,000 if two people own the property.

What do I need to qualify for Social Security Disability?

To qualify for Social Security Disability in Bellevue, you must have a medically documented physical or mental condition that keeps you from performing at least one work activity. What exactly does that mean?

For your impairment(s) to be considered disabling, it must result in limitations in what you can do. For example, a physical impairment of severe carpal tunnel syndrome in both hands may limit use of those extremities to the point where you cannot use them for more than a few minutes in an hour. As a result, you could not work at any full time job, which is defined as being able to work eight hours a day, 40 hours a week.

Disabled? Do not despair

One of the features of living with a disability is the ready availability of unfortunate stories. Some people never got SSD benefits because they lost heart due to the bureaucracy.

One of our goals as Social Security Disability lawyers goes beyond getting people the benefits their lives depend on. We are also about providing emotional support as clients deal with procedures that can be quite maddening.

Do not try to protect assets by transferring them before filing

With bankruptcy looming, you're worried about your assets. You know that some of them can be liquidated to pay off your debt under Chapter 7. Because of your low income -- perhaps you lost a job through no fault of your own -- you know you're going to need to use Chapter 7 instead of Chapter 13.

So, to protect your assets, you start thinking about giving them to friends and family member. That way, you control far less when you file. You can liquidate what little you have left and then get your assets back after the filing is complete. Should you do it?

Is bankruptcy a tool to use during foreclosure?

Generally speaking, bankruptcy is a legal tool. It allows you to eliminate or at least rearrange your debt. It gives you a legal option so that lenders have to work with you, and it can provide you with a fresh start. It's also potentially a tool that you can consider if you're facing foreclosure.

The two often go together. If your home is being foreclosed upon, it likely means there are some serious financial issues to deal with. You may be in debt to the point that you simply can't pay it off. Therefore, you stopped paying the mortgage to worry about simple things like keeping food on the table for your family.

What are the main reasons people don't get SSD benefits?

The specific reasons that people don't get Social Security Disability payments naturally vary from case to case. However, in a more general sense, there are trends to these denials, which can help you see why the denials are made and what you can do about it.

For example, some experts have said that the main reasons people wind up without the financial support they seek are that:

  • They don't have enough medical documentation to show that their claims are true.
  • When denied, they do not use the appeals process.