Disability Pay and Bankruptcy
Many Americans are driven to bankruptcy due to the costs related to a serious injury or long-term disability. While there some insurance plans and benefit systems that provide some degree of compensation while a person cannot complete his or her job, these payments often fall significantly below realistic costs of living. If an injury or disability continues for a long enough period of time, any savings that person had may begin to dry up, forcing them to turn to options such as credit cards.
To discuss legal solutions to your debt problems, contact the Birmingham bankruptcy attorneys of GREENWAY BANKRUPTCY LAW, LLC, by calling (205) 324-4000 today.
Exemption Rules for Disability Pay
In the state of Alabama, there are exemptions in place to protect disability income for those who receive regular assistance from a disability insurer or similar source. Especially in instances when the disability has gone on for a substantial length of time, these payments may practically be all the income a person is living off of. Considering the cost of food, energy, and other essentials, debt often becomes a sort of supplemental income for many who are living with a disability.
The following exemptions are in place to assist these individuals in bankruptcy:
- Up to $250 in monthly disability payments, on average, are exempt
- Includes disability insurance, pay tied to life insurance policies, and annuity contracts
- Includes workers’ compensation policies
As the assumption of disability pay follows that the recipient will only receive benefits while they are suffering a disability, so too does this exemption from bankruptcy liability only extend to the length of the disability. Once a person stops receiving these payments or is considered to be recovered from their disability, this particular exemption will cease to be in effect.
If you are considering bankruptcy as a means to get a fresh start on your finances, contact the Birmingham bankruptcy lawyers of GREENWAY BANKRUPTCY LAW, LLC, today at (205) 324-4000 for more information regarding your options.