When we find ourselves deeply in debt, we are often scared of the repercussions that may ensue. A creditor can decide to raise your interest rate, sell your debt to one of those frustrating debt collectors, slap you with a late payment penalty, or even drag you to court where your wage or benefits may be garnished. Garnishment is a common tactic deployed by a creditor to recover their money from erring debtors. If you are a beneficiary of the SSI income and default on your debt, you may want to know if your SSI can be taken away by these creditors.
Supplemental security income is usually protected from garnishment from typical creditors. However, the federal government can garnish this benefit, especially if you owe federal income tax, federal student loan, or child support.
Creditors usually try a variety of tactics to compel you to pay what you owe. One of these tactics, which you may deem unfair, is wage garnishment. Many debtors fear this rather unfair tactic because it deprives them of a part of their hard-earned money. However, suppose you are a debtor receiving supplemental security benefits. In that case, you have nothing to fear, especially if the debt owed is not a federal income tax, federal student loan, or child support. On the other hand, if you are a debtor and a beneficiary of SSI, you may be eager to know if your SSI income can be garnished. If that is the case, this article is for you.
Can a Disability Check Be Garnished?
Can Supplemental Security Income Be Garnished?
Most people don’t apply for a loan with the intention of not paying back. However, sometimes certain unpleasant circumstances such as job loss or a severe illness can affect your loan commitment. Unfortunately, failure to pay what you owe can result in many issues. Some of these problems include credit damage, lawsuits, and sometimes, wage garnishment. But can social security be garnished?
What is social security?
Like social security disability insurance, social security is a U.S federal government program that offers social insurance and benefits to individuals with insufficient or zero income or who are retired from the workforce.
Since the Social Security Act was signed into law, it has undergone a lot of alterations to include many social welfares and social insurance programs. The term Social Security is used to refer to Old Age survivors, including disability insurance (OASDI). Its advantages are retirement income, disability income, death and survivorship benefits, Medicaid, and Medicare.
SSI garnishment: possible or not?
Your SSI benefits cannot be garnished by creditors and debt collectors, provide you receive them through direct deposits to your bank account. If you get your benefits on a prepaid card, these funds are generally safe as well. The protection is the same even if a company sues you and you end up losing the case.
Below is a list of benefits that are protected from garnishment and bank levies:
- Supplemental Social Security Income (SSI)
- Veterans benefits
- Federal Employee Retirement System
- Civil Service Retirement System
- Federal Railroad Retirement, Unemployment and Sickness Benefits
- Social security benefits
If peradventure, your debt is sold to a debt collector, they wouldn’t be able to garnish your Social Security Benefits not to speak of threatening to garnish it, especially if they are aware that it’s your only source of income.
If the debt collector decides to make threats about taking your Social Security Income, the agency may be guilty of violating the Fair Debt Collection Practices Act.
Factors to Ponder:
In some cases, your SSI may be subject to garnishment. In addition, creditors and collection agencies may devise another means to recover the money you owe, even if they are restricted from touching your benefits.
While typical creditors are not allowed to garnish social security, your SSI can be garnished by the Federal Government if you owe any of the following:
- Federal student loans
- Delinquent child support and/ or spousal support
- Federal income tax
Creditors May Adopt Other Ways to Recover What You Owe:
If SSI is your lone source of income, private creditors, including debt collectors, have restricted options to recover their money. They have no authority to garnish your SSI, and they cannot levy your bank account, provided it only contains SSI transferred there through direct deposit.
However, if you owe a huge amount of debt, a creditor may not give up on their effort to recover what you owe. Just because SSI is your only source of income doesn’t mean that creditors and debt collectors don’t have other ways to recover the money you owe.
Creditors may resort to other tactics if they cannot access your Social Security Funds to recover what you owe.
These actions might include:
- Reporting negative information to credit bureaus
- Selling your accounts to debt collectors
- Seizing your tax fund
- Placing a lien on your house or other real properties
- Seeking a court order to garnish non-Social security funds from your bank account
How to prevent garnishment?
Rather than ask questions like “can a social security income be garnished?” Why don’t you make an effort to pay what you owe? If you cannot afford to pay the debt, there are debt relief programs lined up for student loan debt. Concerning child support, you consider debt consolidation. Don’t just sit down and watch the days go by without doing anything about your debt. Make an effort to pay what you owe to avoid garnishment.
Do Creditors Look at Medical Bills?
Can Debt Collectors Take Your SSI?
If you default on your debt, your creditor will try several tactics in their books to ensure that you pay what you owe. However, if you continue to fail to comply, they may either drag you to a court or sell your debt to a debt collector. In the event that your debt is sold to a collector, the collector will also try you convince you to pay what you owe. If you fail to comply, the debt collector may file a lawsuit requesting that your income be garnished. If SSI is your lone income, will it be garnished?
According to federal law, creditors or debt collectors cannot garnish your SSI, especially when it is your lone income. However, the federal government can garnish your SSI if you owe certain debts like federal income debt, federal student loan, and federal income tax.
To prevent your SSI from being garnished by the Federal Government, ensure you don’t default on your debt. That is the best way to avoid this unfortunate circumstance.
