Bankruptcy and SSDI Retroactive Asset(s)

[acemagoo61]

What is the name of your state? New Hampshire.

I have heard that creditors can not touch income from SSDI. I became disabled in 7/2001. I started to default on my loans in 10/2001. Some of the bills are reported as delinquent 3 years ago which is beyond New Hampshire’s 3 year SOL. Others have default dates (on the credit report sent by Transunion, the only documentation I have) that are another year, year and a half away from the 3 year SOL. I have made no payment on these debts since 10/2001.
(I do have another credit report I printed from an online service that show Experian reporting with the correct first date of default).

1) Since no payment was made after 10/2001, but I have no proof of this and I only have a recent credit report to show the original default date, is there any way of contesting the default date based on not making any payments since 10/2001. Or since I have no documentation is my only recourse the credit reports?
(Actually none of my creditors have contacted since August of 2002).


2) It took me almost 3 years to receive SSDI, I am getting a very large check from SSDI retroactive to 3/2002. Is the lump sum from SSDI protected from seizure in either law suites or bankruptcy? Are assets obtained (i.e. automobile) using money directly traceable to the SSDI lump sum protected from law suites and/or bankruptcy?

3) I live in New Hampshire, but my home state is Connecticut. I have been considering moving back to Connecticut for other reasons. I am confused about Federal and State exemptions. I can’t find an SSDI exclusion for the state of New Hampshire, but there is a Federal exemption. New Hampshire is listed as a state exemption only state while Connecticut allows either state or federal exemption. Am I interpreting this correctly in thinking to get my lump sum SSDI retroactive exempted I would be better off moving to Connecticut as I had planned?

I really want to file bankruptcy and lawyers have told me that the law says SSDI disability benefits are protected under law, but none can tell me for sure how a large (45K) lump sum will be looked at or if I buy a car if the vehicle would be considered an asset derived from SSDI and therefore protected or if it is considered an asset that is fair game for the creditors. They also can not tell me if I file bankruptcy and have the SSDI lump sum in cash if it would be still considered SSDI disability or a fair game asset.

I was homeless for a year and a half and lived in a homeless shelter for nine months of that before being put on state disability. I have lost everything and starting over at below zero (I owe the IRS 15k that I will be paying when the retroactive check arrives).

Is the best approach to continue to keep a low profile and hope none of my creditors sue me before the SOL dates are passed? All debts but one will roll off (pass SOL Date) based on a recent credit report delinquent/closed date by 8/2005 except one. The one outstanding will not roll off until 3/2006.

Knowing the facts about this will help me make my next decision, can anyone help?

Any suggestions?

[ihatearizona]

If you can avoid the bankruptcy try to do it.

As for proving SOL, that's tough unless you have bank statements or something showing the last payments. The only way to retrieve the actual dates would be through the original creditor - but at this point I'd let sleeping dogs lie.

[acemagoo61]

Originally Posted by ihatearizona

If you can avoid the bankruptcy try to do it.

As for proving SOL, that's tough unless you have bank statements or something showing the last payments. The only way to retrieve the actual dates would be through the original creditor - but at this point I'd let sleeping dogs lie.

Curious about your response. If the SSDI money would be protected why avoid bankruptcy? My credit is crap either way, I do not even want credit considering I am on SSDI and I do not plan on trying to get any. If I don’t file and the creditors find and purse me I feel I would then have a larger exposure (i.e., I buy a car with some of the SSDI that is well over the automobile exemption). Plus I have a lot of defaulted accounts on my credit that could turn off an employer should I be able to go back and try to get employment. I have no way of paying off everything even with the lump sum. The law could change for bankruptcy and credit cards so that I could be further exposed.

I am not disagreeing with you. I would prefer not to file and just go on my merry way and not worry about the creditors seizing a vehicle I bought with the money.

If there is a reason I should still avoid bankruptcy, please let me know about it. If I would not be exposed to seizer of a vehicle that I spent $20k+ on with the SSDI money, please let me know. If there is a reason (or precedent) that the SSDI lump sum could be distributed to creditors by the BK trustee, please let me know, a particular example would also be great. Just trying to get all the facts before I make a move.