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How Will Filing Chapter 7 Affect My Disability Payments?

If you are suffering from a disability, chances are that you are in need of the income you receive from your disability payments. Without being able to work, in most circumstances, this is your only source of income, and you can’t afford to lose it if you file for bankruptcy. Generally, you can still receive your payments if you file for Chapter 7 bankruptcy, but there are few terms that go against that. If you are receiving SSI disability payments, those are almost always exempt in bankruptcy.

Social Security Disability Benefits

Where you live and work, and when you are trying to receive the disability benefits, are all factors that could affect whether or not you can continue to receive your money. If you receive reoccurring SSDI payments, you are generally all clear to continue receiving them, since it is clear where the income is coming from, and that you are most likely receiving that money on necessity. However, if you receive a lump sum payment, it is a bit more difficult.

Past Disability Benefits Lump Sum Payments

After receiving a lump sum payment, it may be necessary for you to have to create a description of where the money came from to prove that it was indeed a social security payment.

In general, the disability payments that have been received are exempt from bankruptcy. Due to a recent decision in court, debtors aren’t even required to claim their earnings as exempt during bankruptcy. Some courts do require exemption, but thanks to the SSA exemption, you may also qualify for such an exemption.

Disability Payments in Bankruptcy

If an individual is elderly, disabled or blind, with little to no income, they may receive assistance from the federal program, SSI. SSI disability payments assist those without the ability to normally live life, in ways that others can, to take care of themselves with food, shelter, clothing and other basic life necessities.

Filing bankruptcy does not take away SSI payments, since that income is necessary to take care of one’s self. There are a number of ways that disability claims have to be proved before receiving the funds, and there are ways that the funds must be used to contain the abuse of this money from the federal government.

Disability Payments: Private, State or Otherwise

There are a number of stipulations that go into the exemption process of Chapter 7 bankruptcy, and they are unique to each particular state. It is hard to know just what you are going to be able to keep and what you are not able to keep. Again, there are some ways that you are exempt from having anything withheld from you, but it is necessary to check your state’s exemption protocol. SSDI claims are always tricky and complicated business, so it’s best to partner with an expert attorney. Disparti Law group can assist you with all of your needs. Don’t hesitate to contact us today.


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The Disparti Law Group Accident & Injury Lawyers is one of the most successful law firms serving the greater Chicago and Tampa areas. As the leader in Injury, Disability, Workers’ Comp, and Employment Law, with more than $1 Billion in recoveries, The Disparti Law Group Accident & Injury Lawyers has been named One of the Most Influential Law Firms in America by Trial Lawyer Magazine.

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