How To Pay Debts on Disability

Social Security Disability is a supplemental income plan extended to individuals who are unable to work and maintain an acceptable standard of living due to a terminal medical condition or one that is expected to last longer than one year. Disability benefits are typically minimal, and many individuals living on disability payments alone find it challenging to meet their monthly bills. Although being on disability does not alter your legal obligation to repay your debts, it does alter the methods most creditors may utilize to collect from you.

Instructions

1

Make a list of all your current debts, including mortgage or rent payments, your car payment, utilities and credit cards. Add up the average cost of all of your debts over the course of the month.

2

Compare the cost of your monthly bills to the amount of money you receive in disability benefits. If your debts exceed your benefits amount, or are so high that you have reason to believe you may not be able to pay each debt satisfactorily, you will need to prioritize which creditors you will pay.

3

Set aside money to cover your rent or mortgage payment, car payment, and utilities first. Not paying these debts can result in dire consequences, such as the repossession of your property or the discontinuation of necessary household services, such as electricity.

4

Pay debts that you owe to the government after your primary bills are paid. Some examples of government debts are student loan payments, child support payments and tax debts. Not paying money that you owe to the government can result in the withholding of any tax refund you expect to receive and garnishment of your disability payments.

5

Allocate funds to pay unsecured creditors last. Common unsecured debts are credit cards and personal loans. Private creditors to whom you owe an unsecured debt cannot repossess any property in the event that you fail to make payments as agreed. Although these creditors have the option to sue you for the debt, collecting from you after a successful suit may prove impossible unless you submit payment voluntarily. Private creditors do not have the legal right to garnish your disability payments.

6

Keep a record of each bill that you pay, the date it was paid and much money you have left to pay other bills. Proper money management techniques will help you pay as many debts as possible while living on a limited income.