Featured News 2016 Can My Social Security Benefits be Garnished?

Can My Social Security Benefits be Garnished?

If you're on Social Security Disability, or if you're receiving your Social Security retirement benefits and you're having financial trouble, you may wonder, "Can creditors garnish my Social Security benefits?" It depends on who you owe money to.

In many circumstances, the federal government can garnish your Social Security benefits for several different types of debts, such as federally-backed student loans, federal income taxes (the IRS), defaulted federal home loans, spousal and child support, and some types of civil penalties. However, if you're receiving Supplemental Security Income, you're in the clear because SSI cannot be garnished, regardless of the circumstances.

Federal Payment Levy Program

Of all the government creditors, the one to fear the most is the IRS. Through the Federal Payment Levy Program, the IRS can take 15 percent of a person's Social Security benefits. If you owe a nontax debt to a different agency, the first $750 of your monthly benefits are untouchable.

If the IRS sends you final notice of an intent to levy, you must act fast. Once you receive the notice from the IRS, you have just 30 days to make a payment arrangement, otherwise, the IRS will begin taking its 15 percent cut.

What if you owe money for an old student loan? Even if the student loan was from many years ago, the IRS can still take up to 15 percent, as long as your monthly benefit doesn't isn't reduced to less than $750.

What about child or spousal support arrears? If you owe back child or spousal support, your case would be processed through the national Court Garnishment System; the amount deducted from your benefits depends on the state laws where you live.

Generally, the garnishment amount is determined by the maximum allowed under the Consumer Credit Protection Act (CCPA) or state law, whichever is less. Under the CCPA, you can lose up to 65 percent of your SSA benefits if you ow more than 12 weeks in arrears and you're not supporting another child or a spouse.

If your Social Security benefits are at risk of being garnished because of a debt, contact a bankruptcy attorney to learn how filing for bankruptcy can help you.

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