I'm on disability - should I file?

When a debtor comes into my office and has income of between $500 and $1600 on disability, I generally discourage an immediate bankruptcy.  The reason being that disability income is exempt from most forms of garnishment except repayment of overpayment to the social security administration.


Ordinarily, most of these debtors come in with less than $10,000 in debt.  However, it typically causes problems in their lives with harassment from creditors and sometimes difficulty getting hired in certain part time jobs.  I generally recommend taking a slow methodical approach as there are usually no garnishments that threaten to take income.


Generally, most debtors on disability income will get their bankruptcies done by pro bono attorneys or legal assistance foundations.

In the last several years, I did have one client who paid his legal fees over a period of a year and filed bankruptcy through our office.  He had a rather high disability payment and partial union pension after having been severely injured in a crane accident.  In this case, the bankruptcy provided an incredible improvement in the utility of his life with the removal of harassment from creditors.  However, this situation is more the exception than the rule with most disability income debtors going through legal assistance foundations.