Can Debt Collectors Take Social Security Benefits?

People are living longer after retirement, meaning that you might find yourself talking to a collection agency as a senior citizen. Maybe you forgot to pay a bill. Maybe you had a month when your expenses outpaced your income and had to “let something go this time.” Or maybe, something changed and you’re no longer able to pay your bills on your Social Security fixed income.

Debt collectors have a job to do–get you to pay up. But there are laws that they have to follow. Can they take your Social Security benefits? Generally, no–with one exception.

Protection For Social Security Benefits

Social Security is protected from garnishment for a two-month period. Banks and other creditors aren’t allowed to touch your benefit checks. These benefits are exempt from garnishment by creditors. Section 207 of the Social Security Act prohibits debt collectors or a bankruptcy court from going into your bank account to take Social Security money for debt collection.

Other “untouchable” assets include:

  • Supplemental Security Income (SSI)
  • Veterans benefits,
  • Federal employee and civil service retirement benefits,
  • Benefits administered by the Railroad Retirement Board Administration

Collectors can, however, still go to court and get a judgment against you, then tap into other allowable funds or assets for the purpose of recovering what they are owed.

Banks are required to protect two months of your Social Security money and make it available for you to use. Social Security funds that are direct deposited get special protections from garnishment by any creditors.

Protecting Your SSI

If all of your money goes into one account, how will anyone tell what’s Social Security and what came from other sources? Since most Social Security benefits are paid electronically, either to a bank account or to a prepaid card (“Direct Express” is the most common), it’s obvious where it came from. However, you transfer your SSI funds to another account or bank, you could lose the protection. You will then have to prove that the money was from Social Security.

Should you be faced with a garnishment, you can file a document with the court stating that your money is exempt from creditors.

Is Your Debt Federal or Back Child Support?

If you owe a federal debt or back child support, your Social Security benefits can be garnished, to a certain extent. Garnishments can be levied for:

  • Federal income taxes
  • Federal student loans
  • Nontax debt owed to other federal agencies
  • State-ordered child support and/or alimony
  • Defaulted federal home loans
  • Certain civil penalties.

SSI benefits, can be garnished without any restrictions to satisfy a federal debt.

Are They Trying to Garnish Your Social Security?

If you do owe a debt, a debt collector may try to garnish your Social Security, even though they know they can’t. Don’t stand by and let a vicious debt collector take your Social Security payments before you can pay your bills.

The Law Offices of Jibrael S. Hindi works tirelessly to fight for the rights of Florida consumers. We have litigated over hundreds and hundreds of consumer cases in federal and state court and are ready to help you. Contact our office at 1-844-JIBRAEL today.