Social Security Benefits will have record low increase in 2021

The Social Security Administration (SSA) announced that benefits will increase by 1.3% in 2021 for the annual cost of living allowance (COLA). Obviously, social security benefits are essential for older Americans to maintain current in their household expenses. The historically low COLA increase may expose more retirees to debt pressures.


The 2021 increase of 1.3% is the equivalent of approximately $240 per year for the average retiree. The COLA increase for 2020 benefits was 1.6%. The prior two (2) years the increases were 2.0% and 2.8% respectively.

The COLA increase applies to retiree benefits. COLAs for the Supplemental Security Income (SSI) program are generally the same as those for the Social Security program.

You can see all the historical increases here.


Social security benefits and income are exempt from collection under 42 U.S.C. § 407. This means that creditors cannot collect any debt from social security benefits.

Social security income is not included in the income calculations to determine if a debtor can qualify for a Chapter 7 bankruptcy discharge under the Bankruptcy Code. Further, in Chapter 13 Bankruptcy cases, the calculation of how much disposable income a debtor has to repay creditors does not typically include social security income.

In Chapter 13 bankruptcy cases, Courts consider the amount that a debtor proposes to pay creditors under a Chapter 13 Plan in determining “good faith”. Courts review the total repayment amount where social security income and benefits are excluded from disposable income in Chapter 13 plans.


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Facing overwhelming debt is a daunting prospect. Calls from creditors and threats of repossession or foreclosure can take a toll on families. It may seem impossible to dig out from a hole and regain financial flexibility and freedom. Thankfully, an Edison bankruptcy lawyer wants to help you. Unlike many other law firms that suggest filing for bankruptcy as the sole chance to escape from under debt, we recognize that many alternatives may be available that bring a similar outcome. Even when bankruptcy is the best option, we provide you with all of the information you need to protect your interests. Give Gillman, Bruton & Capone a call today to schedule an appointment and a free case evaluation.

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