Social Security Benefits Generally Safe from Creditors

A common concern amongst Social Security beneficiaries is whether creditors can take their Social Security benefits to satisfy past due debts. Fortunately, your benefits are generally safe from garnishment and levy. Your car lender, your mortgage lender and your credit card companies cannot garnish your Social Security benefits, even after you have your benefits in your bank account – as long as you can show that the money in the account is Social Security, your creditors cannot touch it, and if they do, they have to give it back.

In some circumstances, however, the government can garnish your Social Security benefits. These circumstances include:

  • If you have unpaid child support or spousal support/alimony
  • If you have federal, non-tax debt, such as student loans or federal mortgage loans
  • If you have unpaid federal taxes – but the government can only take up to 15 percent of your Social Security benefits

If you are considering bankruptcy, Social Security benefits are not included for the means test. The means test determines whether you can file for Chapter 7 or Chapter 13 bankruptcy. If you file for Chapter 7, your bankruptcy trustee cannot take any of your benefits to pay off your creditors. If you file a Chapter 13 bankruptcy, Social Security benefits cannot be used by the court to determine how long your plan must be, but you can use Social Security to make your plan payments.

Keeping track of your Social Security benefits is important so that you can differentiate between them and your other money in the event that creditors obtain a judgment against you. Have you had any issues with creditors trying to garnish your Social Security benefits?

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

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