Can Creditors Take My Social Security Disability Benefits?

This week, we take up the intersection of Social Security disability benefits and aspects of your financial life like overdue debt, creditors and your credit history. Whether you receive Social Security Disability Insurance (“SSDI”) benefits or Supplemental Security Income (“SSI”) benefits, your benefits are safe from creditors in most cases. Federal law protects them from garnishing your disability benefits.

The rationale is that these benefits help disabled Americans who are already unable to work and who probably faced an increasingly worse financial situation while they waited on their disability benefits to start. Permitting creditors to take disability benefits would just result in an even worse financial situation.

While private creditors may not be able to get your disability benefits, the federal government can in some cases. Your SSI benefits are usually safe even from the federal government because they are intended for lower income Americans who would have trouble living off a reduced amount. A Tulsa SSI lawyer can provide more information on this issue.

For SSDI beneficiaries, the three cases for which the federal government can take part of your benefits are as follows:

  • Unpaid child support or spousal support (the government can take up to 60 percent of your monthly SSDI benefits)
  • Unpaid federal taxes (up to 15 percent of your monthly SSDI benefits)
  • Non-tax debt owed to the federal government, including food stamp overpayments, student loans and federal mortgages (up to 15 percent, but only if that reduction does not drop your monthly benefits below $750)

Have you faced any problems involving disability benefits and creditors? How did you resolve them?

Troutman & Troutman, P.C. – Tulsa Social Security disability attorneys

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