HomeNewsIs Social Security Benefits...

Is Social Security Benefits Exempt From Garnishment

Can My Social Security Or Other Federal Benefits Be Garnished

How Social Security & other Federal Benefits are Automatically Protected from Garnishment

It depends. Many federal benefit payments are not subject to garnishment in most cases. These payments are known as exempt funds:

  • Social Security benefits
  • Military annuities and survivors’ benefits
  • Benefits from the Office of Personnel Management
  • Railroad retirement benefits
  • Federal Emergency Disaster Assistance

Your bank may be required to automatically protect two months’ worth of federal benefits if they are directly deposited into your bank account by one of the following agencies:

  • Social Security Administration
  • Railroad Retirement Board
  • Office of Personnel Management

Although other exempt funds are not automatically protected, you may be able to stop your creditors from taking other exempt funds from your bank account. Review the notice you should have received regarding the garnishment order or contact the creditor or the court that issued the order.

Protected funds are not always exempt from garnishment. For example, your Veterans Affairs, Social Security, or other government benefits may still be garnished to pay certain debts. These include:

  • Delinquent child support
  • Civil money penalties assessed by the Social Security Administration
  • Fines imposed as a result of federal criminal proceedings

The bank is required to follow the garnishment order in these instances even if the federal benefits are directly deposited into your bank account.

Last Reviewed: April 2021

Protected Social Security Benefits

Most creditors and debt collectors cannot seize your Social Security benefits, as long as you receive them via direct deposit to your bank account. If you receive your benefits on a prepaid card, these funds are generally safe as well. This protection applies even if a company sues you, you lose the case and a court enters a judgment against you.

The following benefits are protected from garnishment and bank levies thanks to federal law:

  • Social Security benefits
  • Supplemental Social Security Income
  • Veterans benefits
  • Civil Service Retirement System
  • Federal Railroad Retirement, Unemployment and Sickness Benefits

Third-party debt collectors cannot even threaten to take your Social Security benefits if they know the benefits are your only source of income. If a collection agency threatens to take your Social Security income, it may be guilty of violating the Fair Debt Collection Practices Act.

Garnishment Of Other Federal Benefits

Many other federal benefits are exempt from garnishment, including:

  • Supplemental Security Income Benefits
  • Veterans Benefits
  • Civil Service and Federal Retirement and Disability Benefits
  • Service Members Pay
  • Military Annuities and Survivors Benefits
  • Student Assistance
  • Longshoremens and Harbor Workers Death and Disability Benefits
  • Foreign Service Retirement and Disability Benefits
  • Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
  • Federal Emergency Management Agency Federal Disaster Assistance

For more information about the various options available to consumers who are struggling with debts, visit the Debt Help section at Bills.com. See the Bills.com article Wage Garnishment if you do not receive Social Security benefits.

Bills Action Plan

If you receive Social Security income and are facing a judgment or already have a judgment, be sure that you are aware that:

  • A judgment-creditor may not garnish your Social Security benefits
  • Two months-worth of benefits are exempt from a bank account levy.
  • Consult with an lawyer licensed in your state to learn more about your vulnerability to creditor execution, in case of any judgment entered against you. A lawyer will explain the risks of having outstanding debts, and help you formulate an asset protection plan suited to your individual circumstances.

    Recommended Reading: Roth Ira Contribution Tax Benefit

    Work With A Credit Counselor

    If you can realistically afford to make some payments on what you owe, you might consider . A qualified, nonprofit credit counseling organization can review your financial situation. A credit counselor may be able to set up a debt management plan, or DMP, with your creditors. A DMP consolidates eligible debts you wish to include into a single, monthly payment that is more affordable. Your credit counselor may be also able to reduce your interest rate and get creditors to waive fees as part of the arrangement. Most DMPs take three to five years to complete and may come with setup fees and monthly administration fees from the credit counseling organization.

    What Is A Challenge To Garnishment How Do I File One

    Garnishment Of Social Security Benefits

    A Challenge to Garnishment, sometimes called a claim of exemption, is a legal form to be filed with the court to claim the property being garnished is exempt from collection. You will receive a Challenge to Garnishment form when your bank account is garnished. You must complete the form and file it with the court as soon as possible to try to keep your money. After you file a Challenge to Garnishment, there will be a hearing in court and a judge will decide if you will be able to keep the money in your account.

    However, until the court decides if the money in your account is exempt, your account will be frozen and you can’t withdraw any money or write checks on your account, and checks you have already written will bounce.

    Don’t Miss: Social Security Benefits At 62

    Exempt Or Protected Money For Specific Purposes

    You can sometimes keep more of the money you earn if you set it aside to pay certain expenses. If you can show you have saved money for a certain purpose, you can keep this money plus the amount that is already protected.

    If you go back to court for a supplemental process case, look carefully at the list of exemption purposes. Write down how much you spend on each of these expenses. Tell the judge, The amount I spend for each of these expenses should be exempt in addition to my other exempt income.

    For example:

    • Meg earns $750 per week.
    • Meg can protect $637.50 of her income from garnishment since the first 85% is protected under Massachusetts law. This means $112.50 goes to the creditor.
    • However, Meg pays $200 per month for heat for herself and her family. There are 4.3 weeks in a month. $200 divided by 4.3= $46.51 per week
    • Meg is able to reduce the $112.50 the creditor can garnish by $46.51 leaving $65.99 for the creditor.
    • However, Meg also pays $500 per month for rent. There are 4.3 weeks in a month. $500 divided by 4.3= $116.28 per week.
    • Meg is able to reduce the $65.99 the creditor can garnish by $116.28 leaving nothing for the creditor.
    • The court will not order any money be taken from Megs pay check to pay the creditor if Meg presents the information about her expenses with bills to the Judge.

    Can You Sue Someone On Social Security Disability

    The short answer is yes. I remember a law professor saying “anyone can be sued for anything.” Winning a suit and collecting on a judgment are the hard parts. … Debt collectors with judgments sometimes try to garnish bank accounts of disability recipients even though the law protects the Social Security benefits.

    Read Also: Benefits Of An Employee Owned Company

    Can Debt Collectors Other Than My Bank Take My Social Security Or Ssi Checks After I Have Deposited Them In My Bank Account

    If you owe unpaid bills for consumer debts, your creditors may sue you in court and try to get a judgment against you for the amount you owe. If they get a judgment against you, they can then try to collect that judgment by garnishing your bank account. A garnishment order issued by a court after a judgment has been entered against you directs the bank to take money from your bank account, and makes the money unavailable to you.

    File For Bankruptcy Protection From Your Creditors

    Can Social Security Benefits Be Garnished? | The Good Law Group

    When you live on a fixed income, budget cuts or credit counseling may not be enough to solve your debt problems. Filing for bankruptcy may help you to protect your assets when you cant afford to pay your debts. Of course, bankruptcy does come with consequences such as credit damage. It may also be difficult to qualify for certain types of new credit post-bankruptcy. Some debts, like past-due taxes and federal student loans, wont be eligible to include in a bankruptcy filing. For these reasons, bankruptcy is usually a last-resort option.

    Don’t Miss: Elevator Division Retirement Benefit Plan

    Can My Social Security Disability Benefits Be Garnished

    3 minute read â¢Upsolve is a nonprofit tool that helps you file bankruptcy for free.Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we’ll never ask you for a credit card.Explore our free tool

    In a Nutshell

    If your sole source of income is Social Security retirement income, disability benefits, or other federal benefits and you keep these funds separate from any other funds, most creditors arenât likely to garnish your benefits. Thatâs because youâre probably judgment proof. As a result, a creditor can’t secure a garnishment order or take money from your bank account.

    Written byYour Upsolve Team. Legally reviewed byAttorney Andrea Wimmer

  • Letâs Summarizeâ¦
  • If you donât repay a debt, a creditor or debt collector can sue you. If the creditor wins, the judge can issue a garnishment order. This type of order allows a debt collector to take money from your paycheck or bank account. If you receive Social Security disability benefits, you likely want to protect your benefits. So itâs important to know how Social Security benefits are treated during garnishment.

    This article covers how garnishment affects Social Security benefits.

    What Should You Not Say To Debt Collectors

    3 Things You Should NEVER Say To A Debt Collector

    • Never Give Them Your Personal Information. A call from a debt collection agency will include a series of questions. …
    • Never Admit That The Debt Is Yours. Even if the debt is yours, don’t admit that to the debt collector. …
    • Never Provide Bank Account Information.

    Read Also: Denied Social Security Retirement Benefits

    Can Social Security Be Garnished

    If you owe someone money, there are ways that the court system can force you to pay your debt. Wage garnishment is one of those methods. However, you likely already know that Social Security benefits do not provide most people with enough money to pay for their monthly household expenses sinceSocial Security payment amounts are pretty small. Millions of Americans rely on these benefits to survive, so is garnishment of these benefits allowed? The answer depends on who is attempting to garnish your benefits. If you are afraid that your Social Security payments might be garnished, then keep reading. We will give you all the details about the garnishment of Social Security benefits, including who can and cannot garnish your benefits, which types of benefits can be garnished, and how much of your monthly payment can be garnished.

  • Can your Social Security benefits be garnished if they are not in a bank account?
  • Can I Get Alimony If My Husband Is On Social Security

    Mississippi Wage Garnishment Calculator

    For those receiving Social Security Disability Insurance benefits, a divorce wont affect those payments. However, SSDI benefits may be garnished to pay child support or alimony following a divorce. And if you were receiving spousal SSDI benefits during your marriage, those payments will remain the same.

    Don’t Miss: What Are Social Security Benefits Based On

    Does Ssdi Look At Your Bank Account

    If you receive benefits through the federal Supplemental Security Income program, the Social Security Administration can check your bank account. … On the other hand, if you receive disability benefits through the Social Security Disability Insurance program, the SSA won’t check your bank account.

    Are My Social Security Benefits Safe From Creditors

    If you take out loans or credit cards, youâre legally required to pay your creditors back. Typically, a debt collector can sue you if you miss payments or default on an account. If they win, the court issues a judgment against you. This judgment can result in a garnishment or bank account levy order.

    A garnishment is a court order requiring an employer to keep part of an employeeâs income and send it directly to a creditor. Wage garnishment orders most often apply to employment-based income, not benefits, alimony, or child support. A bank account levy requires a bank to withdraw money from a debtorâs personal bank account to pay back creditors.

    Debt collectors canât garnish your wages or bank account if youâre judgment proof. Individuals who are judgment proof have very little income, donât have wages available to garnish, and only own legally protected assets. If your sole source of income is Social Security retirement income or disability benefits, the court will likely consider you judgment proof. As a result, collection agencies and creditors canât get a garnishment order against you or take money from your bank account. This is true even if they somehow secured a bank account levy.

    Recommended Reading: Mercy Health Employee Benefits 2021

    Social Security Funds Deposited In The Look

    If the account history shows that Social Security or other protected government benefit funds were electronically deposited directly into your account within the look-back period, the bank must protect the funds in that account up to the total of the direct deposits. If the balance in the account is greater than the total of the direct deposits, only the excess can be frozen in response to the garnishment order. An amount equal to the direct deposits during the look-back period must remain accessible to you.

    If the balance is less than the total of the direct deposits, the account can’t be frozen at all.

    If The Only Money Deposited To My Bank Account Is From Social Security Or Ssi Checks Can I Stop Creditors From Garnishing My Account

    SSI Benefits Are Supposed to be Exempt From Child Support Garnishments

    When any of your creditors gets a court judgment against you which you can’t afford to pay, you should tell them that your only income is from Social Security or SSI and you can’t afford to pay. Some creditors may then decide not to try to get a garnishment order against your bank account. You may also sign an affidavit and give it to your bank to let the bank know that your money comes from Social Security or SSI and shouldn’t be garnished. Your bank can give you an affidavit to fill out.

    Also Check: Divorced Military Spouse Retirement Benefits

    How Can I Tell If My Account Can Be Garnished

    Some property cannot legally be taken by creditors to pay a debt. Property that cannot be legally taken to pay a debt is called exempt. If your bank account only includes income that is exempt, then your account cannot be garnished.Your Social Security is exempt. So, if the only income going into your bank account is your Social Security check, then most creditors cannot garnish it.

    If your only monthly income is Social Security, it would be wise to send an anti-garnishment letter to your bank. If your Social Security is electronically deposited into your bank account, then the bank should automatically look at what exempted amount was deposited within thepast 2 months and allow you, the account holder, full access to that amount. Even if the exempt funds are mixed with other funds in the bank account, the bank has the responsibility to protect the full amount that is exempt. Also, it does not make a difference whether there is a co-owner on the account. However, it is best to keep your Social Security in an account by itself.

    The Bank Must Review Each Account Separately

    The bank must review each of your bank accounts separately. So, if you have money in an account that Social Security funds aren’t directly deposited into, the bank can’t protect these funds even if you transferred some of your direct deposit Social Security funds into that account after they were received. The bank isn’t required or permitted to trace the directly deposited funds to other accounts. But you might be able to assert exemptions in the garnishment action to try to protect any funds that the bank must freeze.

    And the rules can work in your favor as well. The bank must simply protect the balance in the account receiving direct deposits, up to the total of the direct deposits made during the look-back period. It doesn’t matter whether the funds in the account at the time the garnishment order is received are part of the Social Security direct deposits or from a different source entirely.

    Read Also: Does Medicare Have Out Of Network Benefits

    Will My Ssdi Be Garnished If I Am Sued For A Debt

  • Will My SSDI Be Garnished if I Am Sued for a Debt?
  • In todays economy, it is hard to keep up with all of your debts, even if you have a good job. Many salaries have not kept up with inflation, making it difficult for workers to stay on top of rising prices. When debts go unpaid, the creditor usually comes looking for a way to collect, and sometimes this means by filing a lawsuit and garnishing wages. If you have been sued and fear garnishment, it is helpful to know that some of your funds may be exempt from garnishment. These exemptions include things like veterans benefits, military benefits, and certain social security payments. Note that only SOME social security benefits are exempt from garnishment these include social security retirement and Supplemental Security Income benefits. But what if about your disability benefits? Are those also off-limits to a creditor who issues a garnishment?

    Fortunately, the payments you get from Social Security Disability Income are not subject to garnishment. This is true in most situations but there are a few instances where your SSDI can be garnished, such as:

    • For repayment of back child support. This only applies to SSDI benefits, leaving you with a full SSI payment if you are receiving SSI benefits in addition to SSDI.

    For more information and answers to your questions about disability benefits, call an experienced attorney for help. Contact us online today for more information. We can also be reached .

    Most Popular

    More from Author

    Read Now

    Social Security Benefits Sign Up

    Next Steps For Apply For Ssdi Or Ssi Benefits How To Sign Up For My Social Security Account Online Evidence required by DDS for case documentation ...

    How To Sign Up For Medicare Benefits

    Quality Of Beneficiary Services How To Apply For Medicare Online - Step By Step A 2001 study by the Government Accountability Office evaluated the quality of responses given by...

    Go Medicare Benefits Health Center

    See If You Are Eligible Timestamp: : 12 GoMedicare Benefits HelpCenter TV Commercial: 'Last Days: Enroll for 2021 Benefits' Same Disclaimer Fine Print The fine print...

    When Does Social Security Recalculate Benefits

    How Much Can I Earn And Still Get Benefits Will Your Social Security Benefit Be Recalculated? When you begin receiving Social Security retirement benefits, you are considered retired for...

    Go Medicare Benefits Help Center Reviews

    What Is The Texas Health Information Counseling And Advocacy Program Medicare Advantage Plans Explained (2022) If you are eligible for Medicare, the Texas' Health Information, Counseling and Advocacy Program...

    Commonwealth Senior Living Employee Benefits

    Benefits Confirmation Statements In Cardinal Ess New Employee Orientation - Welcome to MOSERS Employees eligible for health benefits received emails from "noreply.HRPRD1@doa.virginia.gov" notifying them that Benefits Confirmations are now...

    Eligible For Social Security Benefits

    Adults With A Disability That Began Before Age 22 Who Is Eligible for Social Security Disability Benefits An adult who has a disability that began before age 22 may...

    Denied Social Security Retirement Benefits

    Social Security Spousal Benefits Social Security Benefits Denied You may be able to get spouses retirement benefits even if you have never worked under Social Security. Your spouse must...

    Roth Ira Contribution Tax Benefit

    Age Limits On Roth Iras ð¥ Roth IRA: How To Become a MILLIONAIRE Without Paying Taxes Though Roth IRAs are often thought of as retirement accounts and most often...

    What Age Eligible For Medicare Benefits

    Medicare Eligibility For People Under 62 Medicare 101 There are a few exceptions for Medicare age limits that can allow people younger than 65 and under age 62 to...

    Company With The Best Employee Benefits

    All In All Companies With The Best Benefits Employee Benefits - What your company needs to know now There are dozens of companies out there that have great benefits,...

    Best Buy Employee Health Benefits

    How Can I Get An Employee Discount At Best Buy Who Has the Best Employee Benefits? - GameStop, Walmart, Target, and Best Buy To make use of your employee...