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Can Debt Collectors Garnish Social Security Disability Income or Other Government Benefits?

If you are one of the millions of people who rely on government benefits to make ends meet, money is probably tight. If you owe money on an old debt or closed account, you may be worried that the creditor will garnish your benefits to pay off your debt. Since losing even part of your benefits could be a recipe for financial disaster, you need to know: Can a creditor garnish your government benefits?

In general, the answer is no. When a creditor is owed a debt, the creditor will first have to file and win a lawsuit against the debtor, or the person who owes the debt. After that, the creditor can request a writ of wage garnishment. These writs are then sent to the debtor’s employer, and the money is taken out of his or her paycheck. The creditor may also attempt to garnish money being held in a bank account.

When a person is unemployed, disabled, or retired, he or she will not have any wages to garnish. In most cases, any other sources of income that the debtor receives are not eligible for garnishment. Both state and federal law recognize that some types of benefits should not be garnished, especially those benefits which are the only source of income for people who are retired, injured, or disabled.

For example, Social Security benefits for disabled or retired persons cannot be garnished, and neither can veteran’s benefits. Additionally, unemployment benefits and workers’ compensation benefits are also protected. Finally, retirement benefits, pensions, life insurance proceeds, 401(k) plans, earned income tax credits, and college or medical savings accounts are all ineligible for garnishment.

While most creditors cannot reach any of these accounts, there are some exceptions to this rule. People who owe back taxes, child support payments, or alimony payments may have their benefits garnished by the state and/or federal governments. However, the average creditor seeking payment for a debt cannot reach these sources of income.

In some instances, creditors may wrongly seize income or assets that come from these protected sources. For instance, a creditor may have the right to take money from a person’s bank account to satisfy a debt. However, if the money in the account comes from Social Security benefits or another protected source, then that creditor will have to return the money. In some instances, a person’s bank may have an obligation to protect some income, like money from Social Security, from being seized by a creditor.

It is not uncommon for creditors to freeze or take money that should have been protected by state and federal law. If this happened to you, you need experienced legal help to remove the garnishment and get your money back.

At Loan Lawyers, our South Florida debt defense attorneys will review your claim for free, and will help you understand your options. If you are struggling because of a wrongful garnishment order, don’t wait to get help. Schedule your complimentary and confidential consultation today by calling (888) FIGHT-13 (344-4813).

  • ABC News
  • American Civil Liberties Union
  • CBS 4
  • CNN
  • Daily Business Review
  • Florida Trend's - Florida Legal Elite 2014
  • Florida Trend's - Florida Legal Elite 2014
  • National Association of Consumer Advocates
  • National Association of Consumer Bankruptcy Attorneys
  • NBC News
  • National Consumer Law Center
  • The New York Times
  • Avvo
  • Avvo
  • Avvo
  • Avvo
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