You can file bankruptcy if your only income is Social Security or SSD. But the question is whether or not you should. If you have no plans to go back to work, you may not need to file bankruptcy since you are what is known as “judgment proof.” This means that your creditors may not be able to collect anything from you even though they can sue you and obtain a judgment against you.

Creditors typically cannot recoup any money from your social security income. You will have to determine if you own any real or personal property upon which creditors could make claims. You would be wise to review your situation with a bankruptcy attorney. 

Keep in mind that although you are judgment proof, you may still want to file a Chapter 7 or Chapter 13 bankruptcy.  If you have secured debt, such as a mortgage or car payment, and you’re behind on payments, Chapter 13 may present the opportunity to make these secured debts current, while still eliminating your credit card or medical debt.

If you have some real or personal property that is not considered “exempt” you can protect the property from creditors by filing a Chapter 13 and paying some portion of your unsecured debt.

There are some social security recipients who are judgment proof and don’t have any non-exempt assets that might still consider filing Chapter 7 bankruptcy. Doing so will stop the phone calls, bills and demand letters.

If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, and have any questions you would like me, Kevin D. Heupel a Colorado bankruptcy attorney, to answer watch me on MartinoTV on Monday, October 26th.