When you are in serious debt and you have missed payments to your creditors, they will try to foreclose on your property, garnish your wages, and even file lawsuits to force you to repay your debts. Chapter 13 Bankruptcy can stop this process in its tracks and protect some of your assets and income. Certain types of income are considered to be exempt from creditors, or “Judgement Proof.” What income is tax exempt? Read on to find out in today’s blog from Groce and DeArmon.
What Does Exempt Income Mean?
Exempt income is a term that describes income that cannot be targeted by creditors. This means that the person’s income and assets are exempt from foreclosure, repossession, garnishment, or lawsuit. There are certain types of income that are totally exempt, and they are important to understand.
There are Federal Exemption guidelines as well as State Exemption guidelines, and your bankruptcy attorney can help you understand the unique details of your particular case. It can get complicated, but there are certain types of income that are always (or almost always) exempt from creditors.
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What Types of Income Are Exempt From Creditors?
There are many types of income that are considered exempt from creditors, but the details are important. If you have one or more of the following income sources, they will likely be protected from creditors.
- Social Security Benefits
- Supplemental Security Income
- Child Support Income
- Public Assistance Benefits
- Unemployment Benefits
- Veteran’s Benefits
- Federal Employee and Civil Service Retirement Benefits
Related Post: What to Know About Bankruptcy and Retirement
Groce and DeArmon Is Here to Help
If you are concerned about creditors and debt, bankruptcy may be a valuable tool to help you regain your financial security. If you have exempt income sources, you may be able to benefit even more from bankruptcy, however, you should consult with an experienced bankruptcy attorney before you move forward. Whether you want to proceed with Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, the team at Groce and DeArmon is here to help. Contact us today to learn more.