When a person becomes disabled, there are often significant unexpected costs. Medical treatments and therapies add up quickly, as does the loss of income from a disabled person unable to work, from a family member needing to devote time to manage care, or both. If there are not significant resources to cover such an emergency, additional costs from missed payments and late fees can add to the financial burden.
While the Social Security program offers support to people of any age who are unable to work, the process of claiming those benefits is a lengthy one. Unfortunately, a large number of people go bankrupt while waiting for SSDI benefits. The average wait time between filing an application and receiving a disability payment is 1 to 2 years.
Don’t Wait – Apply as Soon as You Recognize a Problem
Because the approval process takes so long, there is no benefit to waiting to see whether you might recover and return to work. If you cannot foresee what will happen with your recovery and reasonably predict a date to resume work, you may have a long-term disability. You do not have to be certain of this to start the application process. You can withdraw the application later if it turns out to be unnecessary.
Prepare For a Lengthy Process
The initial application for disability income is frequently denied, which means an appeal is often necessary before you will be approved to obtain benefits. It is not uncommon to receive a second denial, at which time you can request a disability hearing. While you cannot speed up this process, you can avoid unnecessary delays by gathering all of the documentation you need to give your initial application a better chance of being approved and be ready to file an appeal immediately upon receiving a denial. Important documents include comprehensive medical records dating back to the initial onset of the disability as well as recent medical documents, and comprehensive work history.
Knowing that the process can take 1 to 2 years, do what you can to adjust your living expenses to fit your current situation. If it is possible to cut expenses, adjust your living arrangement to reduce costs, or draw from existing savings or disability insurance, you may be able to avoid bankruptcy during this long waiting period.
If You Have to File for Bankruptcy
Bankruptcy, while unpleasant, is another of the legal protections available to you – it can release you from the burden of debts that have become unpayable. This can include medical bills. If you have to file for bankruptcy while waiting for SSDI benefits, make sure your lawyer is informed about your disability application process.
In most cases, SSDI payments are protected in Chapter 7 bankruptcy. However, there are exceptions that can sometimes include disability back-pay payments (a lump sum typically given after an application is approved, based on the date of the onset of disability.) A lawyer can help you to prove that these payments are related to your SSDI and protect them from being taken to settle the bankruptcy case.
