Chapter 13 in Maryland: Is Social Security Income Enough?

 Posted on August 15, 2025 in Chapter 13 Bankruptcy

Filing for Chapter 13 bankruptcy in Maryland can help you protect important assets and reorganize your debts. Only those with a steady income and the ability to make consistent monthly payments will qualify for Chapter 13. But what if Social Security is your only source of income? Could you still qualify under Chapter 13 bankruptcy requirements?

The short answer to this question is that while Social Security income is protected from creditors and generally excluded from the bankruptcy means test, it can still be used to fund a Chapter 13 plan in many cases. Perhaps you have questions regarding whether Chapter 13 (RULE 3015-1) bankruptcy is right for you and whether it can be funded with your monthly Social Security check. Consulting with an experienced Takoma Park, MD bankruptcy attorney can ensure you are on the right track.

What is Chapter 13 Bankruptcy in Maryland?

Chapter 13 bankruptcy is referred to as debt reorganization bankruptcy, in contrast to Chapter 7 bankruptcy, which is commonly known as liquidation bankruptcy. Those who choose Chapter 13 bankruptcy will have a three to five-year repayment plan, along with protection from foreclosures and repossessions. Filing for Chapter 13 requires:

• A regular, stable income sufficient to make the monthly payments in the Chapter 13 repayment plan.
• Income that includes wages, salary, self-employment income, Social Security, or unemployment benefits.
• Unsecured debts of less than $465,275 as of April 1, 2025.
• Secured debts, like mortgages and car loans, of less than $1,395,875 as of April 1, 2025.
• The filer must not have had a bankruptcy petition dismissed for cause within the last 180 days.
• Following a Chapter 7,11, or 12 bankruptcy filing, the filer must wait at least four years to receive a Chapter 13 discharge.
• The filer must wait at least two years from a prior Chapter 13 filing for a Chapter 13 discharge.
• The filer must have filed all required federal and state income tax returns for the previous four years and received credit counseling within 180 days before filing for Chapter 13.
• The filer must complete a debtor education course after filing and before receiving a Chapter 13 discharge.

Can You Qualify for Chapter 13 Bankruptcy With Only Social Security Income?

Social Security benefits are not counted as disposable income under federal law and are exempt from the bankruptcy means test. This means that Social Security benefits are generally exempt from garnishment to satisfy debts. An individual can, however, choose to use Social Security benefits to fund a Chapter 13 repayment plan through voluntary inclusion.

The law requires "regular income from any lawful source." Social Security benefits qualify, assuming they are sufficient to make regular monthly payments for the full term of the Chapter 13 repayment plan. The trustee must believe the filer can sustain payments without default, using only Social Security income.

Alternatives if Social Security Income is Insufficient to Fund Chapter 13 Repayment

Using Social Security income as the sole source for repayment through Chapter 13 can leave an individual with limited income for living expenses or unexpected expenses. If the budget is too tight, there is a risk of dismissal of the Chapter 13 repayment plan. If funding a repayment plan with Social Security income is not feasible, Chapter 7 bankruptcy may be a viable consideration. Creditors can also be negotiated with outside of bankruptcy, and partial payments or hardship programs may be available.

Contact a Prince George’s County, MD Chapter 13 Bankruptcy Lawyer

If you are living on Social Security and considering filing for Chapter 13 bankruptcy, the right legal strategy can make the difference between a successful plan and one that fails. A highly skilled Greenbelt, MD bankruptcy attorney from The Law Office of Donald L. Bell can comprehensively assess your income, expenses, and debt situation to determine whether Chapter 13 is the right choice.

Attorney Bell is currently the National Bar Association’s Bankruptcy chair. With over 20 years of experience, he provides personalized, hands-on guidance with a special focus on saving homes through bankruptcy. Call 301-614-0535 to schedule your free consumer bankruptcy consultation.