Can Social Security Disability Be Garnished? Know Your Rights

You rely on Social Security disability benefits to survive. Outstanding debts may keep you up at night. You wonder if creditors can take your benefits away.

The answer depends on the type of debt you owe. Understanding your rights protects your income and your peace of mind.

Understanding Social Security Benefits

The Federal Social Security Administration provides financial support to eligible Americans. These benefits help people who cannot earn enough income to support themselves.

Three types of Social Security benefits exist:

• Supplemental Social Security Income (SSI): Funds for disabled adults and those over 65
• Social Security Disability Insurance (SSDI): Income for disabled adults unable to work
• Social Security Retirement Benefits (SRB): Payments for retired people and their families

The federal government deposits these payments directly into your bank account. Some beneficiaries receive payments on government-issued cards.

Can SSI Be Garnished?

No, SSI cannot be garnished. Creditors cannot touch your SSI benefits, even through a court order.

If you face a credit card debt lawsuit, your SSI stays protected. Debt collectors cannot take a single dollar from your SSI payments.

However, other Social Security income follows different rules. SSDI can be garnished for specific debts. Child support, taxes, and federal student loans can reach your SSDI benefits.

Protection From Private Creditors

You took out a loan and fell behind on payments. Creditors have legal options to recover their money. They can sue you in court.

A judgment in their favor may result in two actions:

• Bank account levies: The court orders your bank to withdraw money directly from your account
• Wage garnishment: The court orders your employer to send money to creditors before you receive it

Neither option works when Social Security disability is your only income. The court may declare you judgment proof.

What Judgment Proof Means

You become judgment proof when the court cannot enforce garnishment or levies. Courts make this determination when you meet these conditions:

• You have minimal income beyond protected benefits
• You have no wages to garnish
• Your assets are legally protected
• Social Security benefits are your main income source

Creditors and collection agencies cannot obtain garnishment orders against you. Our partner Solo can help you respond to debt collection lawsuits and establish this protection.

Being judgment proof does not erase your debt. The debt still exists on your credit report. Creditors can still contact you about payment.

One critical warning: Never mix your Social Security benefits with other income. Keep these funds in a separate account. Mixing funds can complicate your judgment proof status.

When Your Social Security Can Be Garnished

The federal and state governments play by different rules. They can garnish your Social Security benefits without a court order for specific debts.

Back Taxes Owed to the IRS

The IRS can collect up to 15% of your monthly SSDI benefits. They must send you written notice before taking action. The notice explains their plan to collect from your benefits.

Title II of the Social Security Act authorizes this garnishment. The IRS uses this power to recover unpaid federal taxes.

Child Support or Alimony

Courts can order withholding from your Social Security benefits for child support. Alimony obligations also qualify for garnishment. Federal law 42 U.S. Code § 659 permits this action.

You cannot avoid child support payments, even on disability benefits. Family support obligations take priority over creditor protection.

Federal Student Loans

Federal student loan servicers can garnish your Social Security benefits. They do not need a court order to take action. The government can take up to 15% of your benefits.

Co-signers face the same risk. If you co-signed a student loan, your benefits can be garnished. Many older adults lose benefits because they helped younger family members.

Overpayment Recovery

The Social Security Administration sometimes pays too much. When this happens, they will recover the overpayment from future benefits.

The SSA can withhold benefits until they recover the full amount. Overpayment recovery affects SSI recipients most often. You should report any overpayment immediately to arrange a payment plan.

Bankruptcy and Social Security Benefits

Bankruptcy offers a solution if you live solely on disability benefits. Chapter 7 bankruptcy eliminates most unsecured debts. Credit card bills, medical debts, and personal loans disappear.

The bankruptcy process takes about 90 days after approval. Your Social Security benefits remain protected throughout the process. These benefits qualify as bankruptcy exemptions.

Keep your Social Security funds separate from other income. Mixing funds with other income sources can jeopardize your exemption. A separate account proves your benefits are protected funds.

Bankruptcy may be your best debt management option. If Social Security is your only income, you likely qualify. Consider speaking with a bankruptcy attorney for free to explore your options.

Protecting Your Benefits

You can take steps to safeguard your Social Security disability income. Open a dedicated bank account for benefits only. Never deposit other income into this account.

Respond to any debt collection lawsuit you receive. Ignoring court papers leads to default judgments. Our partner Solo helps you create proper responses to debt lawsuits.

Keep documentation of your benefit statements. These records prove your income source if creditors challenge your judgment proof status.

Know your rights under federal law. The Consumer Financial Protection Bureau provides resources about benefit protection. Private creditors cannot touch Social Security disability benefits through garnishment.

Only government agencies can garnish SSDI for specific debts. These include taxes, student loans, and family support obligations. All other debts cannot reach your benefits.