Can my benefits be garnished to pay my government debts, child support, or spousal support? Social Security and Social Security Disability Insurance (SSDI) can sometimes be garnished to pay money you owe to the government, such as back taxes or federal student loans, and money you owe for child or spousal support.
you're worried that your Social Security can be garnished for your credit card debt, you can rest easy. However, you should know that Social Security, even Social Security Disability, can be garnished to pay some federal and state debt.
Generally, Social Security benefits are exempt from execution, levy, attachment, garnishment, or other legal process, or from the operation of any bankruptcy or insolvency law.
50% if the Social Security recipient is already supporting a spouse or child other than the spouse or child who is due child support (55% if the support is 12 or more weeks late). 60% if the recipient is not supporting another spouse or child (65% if the support is 12 or more weeks late).
Ordinary garnishments
Under Title III, the amount that an employer may garnish from an employee in any workweek or pay period is the lesser of: 25% of disposable earnings -or- The amount by which disposable earnings are 30 times greater than the federal minimum wage.
If the value of your resources that we count is over the allowable limit at the beginning of the month, you cannot receive SSI for that month. If you decide to sell the excess resources for what they are worth, you may receive SSI beginning the month after you sell the excess resources.
You'll be subject to garnishment of up to 50% of your Social Security benefits if you're supporting a spouse or child other than the one specified in the court order. If you aren't supporting another spouse or child, up to 60% of your after-tax income can be garnished.
The bottom line. While debt collectors may not automatically sue over a $3,000 credit card debt, they have the right to pursue legal action if they believe it's a viable option.
A levy allows the creditor to take funds directly from a bank account to satisfy unpaid debts or taxes. In most cases, levies are permitted only by court order as part of a lawsuit judgment. However, certain government agencies, including the Internal Revenue Service, can levy a bank account without a court order.
Therefore, because their income is protected from debt collection, seniors do not need to worry about losing any of their monthly income to debt collector garnishment. Concern about losing monthly retirement income to garnishment by a debt collector should not be a reason to file a bankruptcy.
Bank accounts solely for government benefits
Federal law ensures that creditors cannot touch certain federal benefits, such as Social Security funds and veterans' benefits. If you're receiving these benefits, they would be exempt from garnishment.
Most creditors and debt collectors cannot seize your Social Security benefits. Generally, benefits from Social Security received via direct deposit or in a prepaid card are safe from garnishment. This protection applies even if a company sues you, you lose the case and a court enters a judgment against you.
The law sets certain limits on how much debt collectors can garnish your wages and bank accounts. Certain federal benefits, such as social security benefits and veterans' benefits, generally cannot be garnished.
Section 1024 of the Tax Payer Relief Act of 1997 (Public Law 105-30) authorizes the Internal Revenue Service (IRS) to levy up to 15% of each Social Security payment for overdue Federal tax debts until the tax debt is paid.
They might also hire asset search companies that use public records and databases to locate accounts. In some cases, creditors can subpoena your employer for information about direct deposits. Once they identify a bank account, creditors can seek a court order to freeze or garnish it.
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
For most debt collection agencies, suing for very small amounts is not economically viable. While specific thresholds vary among agencies and jurisdictions, certain principles generally apply. Typically, agencies may set a minimum threshold, often around $500 to $1,000, below which they are unlikely to sue.
Maybe—and it depends on the type of benefits you do or will receive. Because SSI is a needs-based program, any settlement funds could affect your SSI benefits. You must report all income, assets, and other aid, including money recovered from a personal injury lawsuit.
Certain federal benefits, such as Social Security, SSI, and Veterans Assistance, have additional protections under federal law when those funds are deposited into a bank account or onto a prepaid card. These federal benefits remain exempt from garnishment when directly deposited into your bank account.
Because SSI is a means-tested program that is not based on remuneration for employment, SSI benefits authorized under title XVI of the Act are exempt from child support garnishment and income withholding.
Where the overpayment is $2,000 or less and you file a request for reconsideration or waiver, Social Security will waive any collection of the over-payment (unless you were at fault in creating the overpayment). This is known as the SSI $1,000 Rule.
Social Security will take into consideration the amount of your assets, because it is a needs-based program. To be eligible for SSI, your assets must be less than $2,000 for an individual and less than $3,000 for a married couple. However, not all assets count towards the resource limits.
If you qualify for SSDI and SSI, there's no set back pay maximum for either. Essentially, you can estimate your potential back pay by multiplying your average monthly benefit amount by the number of months you are eligible to receive.