I Am On Disability With No Assets. Should I File for Bankruptcy?
Filing for bankruptcy may or may not be helpful depending on whether you have income from another source, you own assets you want to protect or you are simply receiving harassing phone calls from creditors. Veterans disability and Social Security disability benefits are protected from creditors by regulations in most cases. Some disability recipients are still able to work on a part-time basis and receive disability. In that case, a creditor can seek to garnish wages or attach a bank account. If a disability recipient does not have income from other sources that can be garnished or attached and does not have assets to protect, like a house with equity, that person might be “judgment proof.” Judgment proof means that even if a creditor did sue and get a judgment, the creditor would not able to collect on the judgment because the disability recipient has no assets to take. In this case, bankruptcy might not be the right option because there is nothing to protect that the law does not already protect, namely the disability benefit itself. Creditors can be ruthless though. While laws exist to protect the consumer against harassing collection activities, these companies can still go overboard trying to collect on a debt. A judgment proof disability recipient might consider filing for bankruptcy just to stop the harassment.