If you are receiving Social Security or SSI (Supplemental Security Income) chances are that you are living on a fixed income. If you owe creditors for medical bills, credit cards or personal loans you may be worried that the creditor will garnish your social security or disability checks. The good thing is that federal law protects your Social Security retirement, disability and SSI benefits from being touched by regular creditors. Section 207 of the Social Security Act prohibits creditors from being able attach, garnish or levy money from Social Security. If you owe money to credit cards, medical bills, pay day loans, personal loans, debt from repossession, and foreclosure then you do not need to worry that your Social Security or SSI will be garnished. Under federal law regular creditors cannot attach or seize money from your Social Security benefits.
Does that Mean Your Social Security is Protected from Any Creditor?
First you need to determine what benefits you are receiving to know whether your benefits may be subject to garnishment by the federal government or for certain debts. Generally benefits are paid out as either retirement income, SSDI or SSI. SSDI benefits are provided as an income supplement where there is a disability that limits your ability to work. SSDI income is not affected by how much income you are making. SSI on the other hand is intended as a supplemental income to provide for basic necessities for people who are disabled, aged or blind.
There are certain creditors that can attach or garnish your Social Security retirement and SSDI benefits among these are the federal government for IRS debt. If you owe taxes to the federal government then they can garnish your Social Security retirement and SSDI benefits to cover the past due taxes. The federal government is allowed to pay themselves out of these benefits to cover any income taxes you owe. If you are receiving SSI benefits then the government cannot garnish these wages to pay your federal taxes.
If you owe federal student loans then your Social Security retirement and SSDI are also subject to garnishment. Unfortunately student loans are one of few debts that if you owe and don't take care of, it can come back and haunt you. Not taking care of federal student loans can really cut back an already limited income. If you owe student loans it is very important that you find a way to resolve these debts before you are forced to pay them back through your Social Security checks.
Social Security or disability checks (SSDI) can also be garnished if you owe child support payments. Having outstanding child support payments or arrears can allow the government to take your social security benefits. A person may bring an action to enforce their rights for currently owed child support and alimony payments and these can be enforced against your benefits. Again SSI benefits are not subject to garnishment for child support or alimony payments.
Although regular creditors cannot garnish or levy a bank account with Social Security or disability payments it is important that you do not commingle your Social Security benefits with other income. A bank may mistakenly allow a creditor to seize the money that is in your account if you mix you Social Security income with other money. You will then have to prove to court that the Social Security money in your bank account is not subject to seizure. You can use section 207 of the Security Security Act to defend any improper seizure of benefits.
If you cannot afford to pay the debts owed and are concerned about other assets being seized or garnished then you should consider filing for bankruptcy . Talk to a local bankruptcy attorney in your area to determine if you qualify and are a good candidate for bankruptcy.