For many people, garnishments are the event that drives them to file for Bankruptcy. Those on Social Security are already on a limited budget and any loss of income can result in them not being able to meet even their most basic needs.
Can Creditors Take Money from my Bank Account?
The good news is that most creditors cannot garnish Social Security Benefits. It does not matter if you already have the funds saved in a bank account.
In some cases you do need to prove that funds in bank accounts are Social Security to prevent them from being taken from a bank account.
Are There Any Reasons that my Bank Account Could be Accessed?
There are a few exceptions:
1) Child Support and Alimony
If you owe money for current or back Child Support or Alimony your Social Security can be garnished.
If the court order specifies a specific amount that will amount will be garnished up to 50%, if you are supporting another spouse or child besides the one the Child Support or Alimony order is for.
That amount increases to 60% if you are not supporting another spouse or child. The amount in either case can be increased by 5% if the garnishment order or other evidence is submitted to show that the original support order is 12 or more weeks behind.
If you do have multiple orders for child support and/or alimony, it is not a first come first serve basis.
The federal law requires that the payment be split between all recipients, but some payments are made over others if there is not enough to make all the payments.
Ongoing Child Support Payments are paid first, then any child support arrearage amounts, and lastly Alimony Payments.
The way the debt payments are split are based on the laws of the state that you live. They can be split based on the total dollar amount of each order or split evenly between all orders.
If you owe Federal taxes, then the Internal Revenue Service can take up to 15% of your monthly Social Security benefit.
If your student loans are in default, then up to 15% of your monthly benefit amount can be garnished.
However, unlike for Federal Income taxes, the federal student loan debt and student loan debt garnishment cannot leave you with less than $750 of your benefits per month.
Under some state laws, up to 25% of benefits and wages can be be garnished to pay for past due criminal restitution payments.
Is Supplemental Security Income the Same as Social Security?
Supplemental Security Income (SSI) has the same protections as normal Social Security system income.
However, the protections for this income are even stronger.
None of the previous exceptions listed above that allow for garnishment of social security income or benefits can be used to garnished Supplemental Security income.
What are my Options with Social Security Garnishment?
1) Pay off the underlying debt.
2) File for Bankruptcy.
Chapter 7 can provide relief by providing a temporary stop to the garnishments and getting rid of other debts your may have.
Chapter 13 can provide protection for 3-5 years while your are in your bankruptcy. Chapter 13 allows you to propose a 3-5 year plan during which your social security benefits are completed protected by the automatic stay in Bankruptcy.
You may be required to pay back some or all of the underlying debt that caused the garnishment, but could provide a payment that is more affordable to you.