Is a SSDI disability check exempt?

[casper11]

I will soon file bk... but today I received a $20k check from the Federal Government (for back disability) along being awarded full disability. I read somewhere that disability checks were exempt from attachment or garnishment and such... I wonder if I can put this $20,000 in a savings account? Is it exempt from creditors in a bk? Or is it in jepardy?

[BK2008]

It should be exempt. I would put it in a separate account with a separate bank unrelated to your creditors (avoiding cross collateralization). And have the bank flag that accounts as a SSDI account, so if there is a question on where the funds came from, it won't be seen as regular income.

[AngelinaCat]

I agree with BK2008. Social Security S.S.I. and any retirement is exempt also insurence or insurance proceeds such as annuities. Your back bayment is your expenses you incurred by living in pain and suffering, out of your own pocket and has aided to your delema of bk, RIGHT??? Remember that. It is money you would have had if you could have gotten it.

Please do mention it to your lawyer though. He will be better at advising you. 'Hub

[casper11]

You folks sound knowledgable so I would like to ask one more question:
Both significant other and I have been filing joint tax returns for 20 years but never married. We live in AZ, a community property state. We each own our on separate businesses. Mine is an LLC and hers is a sole prop.
We each have our own credit.
My question is this: Is there any way I can bk my small LLC and myself and not take her down with me? How can I prevent creditors going after her as it is well known and established we have been "considered" married for 20 years?

[BK2008]

Well, just by the fact that you're a limited liability company, I think as long as she is not an officer/owner, there would be no way for them to go after her (or you personally), unless you made some personal guarantees on loans, etc. Or you credit cards are in both of your names. That's why it's called 'limited liability company'. You are merely shutting down the business, not a personal BK, correct?
I worked for a LLC that shut it's doors, didn't pay its creditors, and he never filed BK. Just ceased operations. They sent the LLC to collection agencies, but I don't believe anything ever came of it. Still getting 'please pay' stuff on it, a year and a half later.

[AngelinaCatHub]

Casper, I don’t think any state in the Union recognizes common law marriages. To day no. Now if you co-mixed contracts or mortgages, you have a problem. Legally they only see you, not your “other”. If the “other” mingles her monies with yours, that may become an issue. That would be a fine line as you mix with her as well. I would not advise a lie, but what part of the household does each person take upon? As far as and independent business, what part does she have in yours and what part do you have in hers? If separate, simple. If not, see a lawyer. ‘Hub

[ssdsco]

I will soon file bk... but today I received a $20k check from the Federal Government (for back disability) along being awarded full disability. I read somewhere that disability checks were exempt from attachment or garnishment and such... I wonder if I can put this $20,000 in a savings account? Is it exempt from creditors in a bk? Or is it in jepardy?

I'd recommend starting with the branch manager and asking them what happens in the case of a garnishment of an account with only disability money.

From what I've read no matter what bank or source of funds you have the odds are the bank will freeze or release the funds to creditor and let you deal with the "surprise the money's gone" and getting the money back from the creditor.

Also I'd strongly recommend talking to an attorney about the $20k. Once you cash the check and turn it into personal funds it may not be exempt from BK. You may need to spend it on the basics before you file.

[casper11]

Thank you for your responses.
I do not see how I can file without taking down my girlfriend of 20 years. We have a mutual mortgage that will be exempt but all of our credit reports show us as married. We have several credit cards each with the other as a secondary. As much as I wold like to save at least one of our Grade A greedit ratings but I just don't see how I can keep the wolves off her back. Even if we battle each case and win, they will ruin her 780 score for years to come...
No, It is a shame but I have 275,000 in unsecured business/personal credit and I cannot keep up the payments any longer being recently disabled.
She has only $60k in unsecured debt and that really isn't a heavy burden for her as she is only using 20% of available credit.
Our house is ok (not $150k in equity). Our cars are ok.

I am willing to relocate my home address, if it would help.
If there was only a way to keep them from going after her.