Thursday, December 8, 2016
Can I Use Social Security Income To Pay Chapter 13 Plan Payments?
When you file a Chapter 13 bankruptcy case, you are required to make payments each month to the Chapter 13 trustee. The trustee will then take that money and pay it to your creditors, which saves you from having to make multiple payments each month. One of the key requirements to a Chapter 13 is having a steady flow of income to fund the Chapter 13 Plan, and make the Plan payments to the Trustee.
If you are not working, but have income from other sources, that money can be used to make your Chapter 13 Plan payments. If your income source is from social security, you are allowed to pay your Chapter 13 bankruptcy payments with those funds. Here are the most common sources of income used to pay Chapter 13 Plan payments:
• Wages from your employment, as shown on your income taxes and/or on a W2 form.
• Retirement income, such as a pension.
• Income you receive from being self-employed, and that you can verify from prior year tax returns or 1099 forms.
• Income paid to you for a rental property that you own, which must also be verifiable.
• Your spouse’s income, if you filed a joint case or there is some other reason your spouse is contributing to your monthly income.
• Child support payments, although you are not typically required to rely on child support to make payments on your Chapter 13 bankruptcy.
• Spousal support (alimony) payments from a divorce.
If, during your Chapter 13 case you become unemployed, you can ask the Court to give you time to find new employment to make your payments. This needs to happen quickly, because if you fall behind on your plan payments the Trustee will ask the Court to dismiss your case. So, when considering Chapter 13 bankruptcy, it is important to have reliable employment you can count on for the duration of your case. That said, we do understand that things happen, and are here to help you keep your case going from start to finish. If you have more debt than you can pay, call us to find out if Chapter 13 is right for you.
For help with bankruptcy, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.