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Can Creditors Take My Social Security?

On Behalf of | Mar 18, 2019 | Bankruptcy Basics, Seniors and Bankruptcy

This is a frequent worry of individuals who rely on their Social Security check to live.

Generally, Federal law, which applies everywhere, makes your Social Security benefits exempt from levy, garnishment or assignment by regular creditors.

This means that even a creditor who sues you and gets a judgment cannot take your Social Security from you.  There are some limited exceptions to this rule for certain kinds of debts owed to the government, which are explained below.

Are Social Security benefits protected by law?

Yes. Except for certain federal agencies, creditors cannot garnish or seize Social Security benefits, whether it is retirement, disability, survivor’s benefits, or SSI. Congress has written this protection into law. This means that ordinary creditors such as credit card companies, medical collectors, and loan companies, cannot take Social Security benefits under any circumstances.

Does it matter if the creditor has sued me in court?

No. These protections apply, even if the creditor has a court judgment against you. The court may not order you to pay the judgment out of Social Security money.

Do these protections exist if the Social Security money is deposited into a bank account?

Yes. Even after Social Security funds are deposited into a bank, they are still protected from garnishment or seizure. You can make it easy to identify your Social Security income by not depositing money from any other source into the account.  Make that account only Social Security.

Can government agencies take my Social Security benefits?

Yes, but only under limited circumstances.

First, SSI (Supplemental Security Income) cannot be taken at all.
The federal government can withhold some part of Social Security payments for a few things including taxes and federally subsidized student loans.

Is Social Security protected in bankruptcy?

Yes.  The protection for Social Security extends into bankruptcy.  Money that can be traced to Social Security is either exempt or in some instances it never becomes property of the bankruptcy estate.  Likewise, Social Security income is excluded from the income calculations in the means test.

Contact Us to Learn How to Protect Your Social Security Benefits

If you are planning to file a bankruptcy case, confer with the attorneys at Levitt & Slafkes regarding the best strategy for protecting your Social Security benefits. We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation.