Do Social Security Benefits Affect Qualifying for Chapter 7 Bankruptcy?

If you receive Social Security benefits and are considering filing Chapter 7 bankruptcy in Tampa or anywhere in Florida, one of the most common questions is:

Will my Social Security income prevent me from qualifying for Chapter 7?

In most cases, the answer is no. Social Security benefits generally do not count when determining whether you qualify for Chapter 7 bankruptcy. Below, we explain how Social Security income is treated, how the Chapter 7 means test works, and what Tampa filers need to know before filing.

How the Chapter 7 Means Test Works

To qualify for Chapter 7 bankruptcy, you must pass the Chapter 7 means test, which compares your income to the Florida median household income for a household of your size.

The means test is designed to determine whether you have enough disposable income to repay creditors under a Chapter 13 repayment plan. If your income is below the median, you usually qualify automatically. If it is above the median, additional calculations are required.

Important: Not all income is included in the means test.

Is Social Security Income Included in the Chapter 7 Means Test?

No. Social Security benefits are excluded from the Chapter 7 means test.

This includes:

• Social Security retirement benefits

• Social Security Disability Insurance (SSDI)

• Supplemental Security Income (SSI)

• Survivor benefits

Because Social Security income is excluded, many individuals who appear to earn “too much” on paper actually still qualify for Chapter 7 bankruptcy.

Do You Have to Disclose Social Security Income?

Yes. While Social Security benefits are not counted for the means test, they must still be disclosed in your bankruptcy paperwork.

The court requires full financial transparency, but disclosing Social Security income does not hurt your eligibility for Chapter 7.

Are Social Security Benefits Protected in Bankruptcy?

In most cases, Social Security benefits are fully protected in bankruptcy.

Protection from Creditors

Federal law protects Social Security benefits from:

• Credit card companies

• Medical creditors

• Personal loan lenders

• Collection lawsuits

Bank Account Considerations

If your Social Security benefits are:

• Deposited into a separate account, they are easier to protect

• Mixed with other income, tracing may be required

Keeping Social Security funds separate can help avoid complications during your Chapter 7 case.

Can You Qualify for Chapter 7 Using Only Social Security Income?

Yes. Many people who receive only Social Security income qualify for Chapter 7 bankruptcy because:

• Their income is excluded from the means test

• They often have little to no disposable income

This is especially common for retirees, disabled individuals, and those on fixed incomes.

What About a Spouse’s Income?

If you are married and filing bankruptcy:

• Your spouse’s income may need to be disclosed

• Your own Social Security income is still excluded from the means test

In some cases, married couples can still qualify for Chapter 7 even when one spouse earns wages, depending on household expenses and deductions.

Common Myths About Social Security and Chapter 7 Bankruptcy

Myth: Social Security income disqualifies you from Chapter 7

Fact: Social Security is excluded from the means test

Myth: Filing bankruptcy puts your Social Security at risk

Fact: Social Security benefits are protected by federal law

Myth: You cannot file bankruptcy if Social Security is your only income

Fact: Many Chapter 7 filers rely solely on Social Security

Should You Talk to a Tampa Chapter 7 Bankruptcy Attorney?

Even though Social Security benefits are protected, mistakes on bankruptcy forms can still cause delays or issues. An experienced Tampa Chapter 7 bankruptcy attorney can:

• Confirm you qualify for Chapter 7

• Ensure Social Security income is disclosed correctly

• Protect your benefits and bank accounts

• Help you eliminate credit card debt, medical bills, and lawsuits

Get Help Filing Chapter 7 Bankruptcy in Tampa

If you receive Social Security benefits and are struggling with debt, Chapter 7 bankruptcy may be an excellent option.

At chapter7tampa.com, we help individuals and families:

• Understand the Chapter 7 means test

• Protect Social Security income

• Get a fresh financial start

• 
  

Schedule a free consultation today to find out if you qualify for Chapter 7 bankruptcy in Tampa—even if Social Security is your primary source of income.