Money & Debt

In short, no. You will not lose your benefits if you file for bankruptcy. A creditor can not take money from your accounts that you got from public benefits. This includes:

• Social Security Benefits
• Supplemental Security Income (SSI) Benefits
• Food Assistance (including Electronic Benefit Transfer (EBT) Benefits and Supplemental Nutrition Assistance Program (SNAP) Benefits)
• Housing Assistance (including Section 8 and housing vouchers)
• Veterans’ Benefits
• Civil Service and Federal Retirement and Disability Benefits
• Military Annuities and Survivors’ Benefits
• Student Assistance
• Railroad Retirement Benefits
• Merchant Seamen Wages
• Longshoremen’s and Harbor Workers’ Death and Disability Benefits
• Foreign Service Retirement and Disability Benefits
• Federal Emergency Management Agency Federal Disaster Assistance.

There are exceptions to this. If you are using your public benefits to pay off federal taxes or overdue student loans, they may be taken. This also only applies to personal money. It does not apply to money used for business purposes. 

You also may not lose your child support, your unemployment benefits, or your alimony. You also may not lose certain reparation payments you are getting. You may not lose wrongful death money, nor life insurance money. If a creditor tries to take this money, you should talk to a lawyer.

You may want to get a hearing before a judge. You’ll do this so you can request that certain funds be exempt. You should document where you are getting your money, and should also be sure to tell the court that you are receiving benefits in your bankruptcy filings. You should do this in a way that shows the amount of money (or the benefit) and the source of it. You will want to be able to show the judge that you are getting the money as a public benefit. If you succeed in explaining your situation to the judge, your funds should be usable again.  However, if you do not list your benefits or your benefit income on bankruptcy documents, then it could be considered perjury or fraud in your bankruptcy case. 

While filing bankruptcy does not affect your ability to stay in subsidized or government housing, landlords that participate in the Section 8 program may use any non-discriminatory, legal standard for screening tenant applications.  These landlords may consider credit scores being too low, and a bankruptcy filing stays on your credit report for 10 years after filing chapter 7 bankruptcy.