Social Security recipients often deal with great financial stress. Typically, they may be unable to work due to age or disability and debt tends to pile up. One common question we hear from our clients is whether or not Social Security benefits can be garnished.
Fortunately, Congress has protected Social Security benefits from many kinds of creditors and benefits cannot be garnished for consumer debt like credit cards, medical bills, and personal loans. Although Social Security income is protected, this protection does not extend to any collateral that secures the debt, and a creditor will not be stopped from repossession or foreclosure action simply because the debtor receives Social Security benefits. We encourage clients to receive their benefits from Social Security through direct deposit. We also advise clients to keep Social Security payments in the same account they were initially deposited into. In other words, we advise against transferring Social Security payments to other accounts after they are received. This adds an extra layer of protection because it prevents your bank from “freezing” your account in response to a garnishment order while you defend against it in court.
There are types of debt that can reduce your Social Security payments. For instance, if you are behind on paying your federal income taxes, the Internal Revenue Service (IRS) can subject your benefits to a 15% levy to pay towards your delinquent federal income taxes. The IRS can do this no matter how much money you will be left from your monthly benefits. This means that low-income individuals living below the poverty line can be subject to an IRS levy for their back taxes. Additionally, if you do not pay back your federal student loans, the federal government can seek up to 15% of your monthly Social Security benefits until the loan is paid in full. However, unlike the IRS’s ability to leave you with nothing, the federal government in this case has to leave you with at least $750 per month. If the federal government is taking a percentage of your benefits for past-due federal income taxes of student loan debt, you may still have options such as negotiating to lower your debt or asserting a hardship.
Finally, one of the most common questions we hear is if alimony or child support can be deducted from Social Security benefits. The answer to this question depends on the type of benefit you receive. If you receive retirement or Social Security Disability Insurance (SSDI), the answer is yes; it can be. Under the Court Ordered Garnishment System, if you are delinquent in child support or alimony, up to 65% of your benefits can be taken. On the other hand, Supplement Security Insurance (SSI) benefits cannot be seized to pay child support or alimony arrears. Although child support or alimony can be deducted against your Social Security benefits, you may be able to have the amount you owe significantly lowered.
If you need assistance in obtaining Social Security benefits, contact us to get in touch with an experienced attorney who can help you during the process. Please call us at (904) 777-7777 or email us using our contact form.