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Can Creditors Take My Social Security Disability Benefits?

Debt is a concern for households all over the United States. Consumer credit company Experian says that consumer debt in our country has risen to $14.1 trillion in 2019. That is a record high. However, people with disabilities have greater concerns when it comes to this figure.

Fixed incomes, reduced working potential and medical bills make it hard for people with disabilities to pay debts. This can lead to creditors garnishing their bank accounts. Does that mean creditors can garnish their Social Security?

Can Social Security Disability Be Garnished?

In short, no, most creditors cannot garnish your Social Security Disability benefits. As with most rules like this, there are exceptions and caveats that need explanation. Here is what you need to know.

Which Benefits Do Federal Law Protect?

Rules set by the U.S. Department of Treasury require banks to automatically protect certain benefits from the government. But this only applies to benefits received through direct deposit. Those benefits include:

  • Civil Service Retirement System
  • Federal Employee Retirement System
  • Federal Railroad Retirement, Unemployment and Sickness
  • Social Security
  • Supplemental Security Income
  • Veterans

That means banks often cannot garnish your Social Security Disability Insurance (SSDI) or your Supplemental Security Income (SSI).

What Are the Exceptions to the Rule?

Though banks must protect your benefits, there is a limit to their protections. The bank can only protect the last two months’ worth of Social Security Disability payments. If you have accumulated three months of payments, then the bank can freeze or garnish one months’ benefits. If that garnished money is exempt from garnishment under federal or state law, you can go to court to get it back.

If you receive your benefits through check instead of direct deposit, banks do not automatically have to protect those funds when deposited. But these funds are still protected from garnishment. That means you will have to go to court to prove that the garnished funds were from Social Security.

What About Government Creditors?

The government can garnish your Social Security benefits for certain debts. These debts include:

  • Child Support and Spousal Support
  • Federal Student Loans
  • Back Taxes

However, SSI is still protected from these garnishments.

Is My Prepaid Card Protected?

If you receive your SSDI or SSI through the optional prepaid card, those benefits are also protected. The Consumer Financial Protection Bureau has even more info about your rights when it comes to debt. Check out their website for more info.

Still Have Questions About Your Social Security Disability?

Your Social Security benefits may have protections against creditors, but these protections are complex. Seeking help from a qualified legal professional may be the best solution.

At our Tulsa disability law office, our Oklahoma social security lawyers work to help disability applicants. We have years of experience and informative resources to help you get the benefits you need. You can contact us at (918) 265-1404 or through our online contact page.


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