Can Your Social Security Disability Benefits be Garnished?

According to the Social Security Administration, there are about 9 million people currently receiving Social Security disability benefits each month. For many, it’s their only monthly income. Can those funds be garnished by creditors? We’ll talk about it in this entry.

What are Social Security disability benefits?

Known as Social Security Disability Insurance (SSDI), these benefits are paid directly to you or certain members of your family because you cannot work due to a medical condition.

How do Social Security disability benefits differ from Supplemental Security Income?

Both types of benefits are distributed by the Social Security Administration, but they serve completely different recipients. While SSDI benefits are earmarked for people and some members of their family because of a medical condition, Supplemental Security Income (SSI) is distributed to disabled persons with little to no income.

Can my Social Security benefits be garnished by creditors?

The short answer is that it depends on who the creditor is and what type of benefit you’re receiving. A typical bill collector cannot garnish your SSDI or SSI benefits. However, SSDI benefits can be garnished by the federal government if you owe back taxes, student loan debt that’s guaranteed by the feds and child support obligations. SSI benefits, on the other hand, cannot be garnished – even for unpaid taxes, student loan debt or child support.

Are my Social Security benefits automatically protected?

Yes they are. Before 2011, it was up to individuals receiving the benefits to notify their court and local sheriff that funds in checking accounts were exempt. Thanks to a federal law passed in 2011, however, banks are now required to review accounts before garnishment is allowed – to make sure those funds aren’t protected Social Security funds.

If debt has you in a financial bind, call The Oswalt Law Group

If you’re receiving Social Security benefits and want to protect them as you climb out of debt, call us here at The Oswalt Law Group. Our skilled team will thoroughly analyze your situation and put together a workable plan for you. The first consultation is always free, so call us at (602) 225-2222.