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By: Mitch Grissim, Esq.

Millions of people across the nation rely upon Social Security Disability benefits every single year. These benefits are the only lifeline available to many who have suffered debilitating accidents, injury or illness. They are also very often not enough to pay bills and entirely make ends meet. This leads to the terrifying thought of bill collectors garnishing wages to recover debts, which can leave people in dire situations.

Many people are understandably curious as to whether debt collectors can garnish or take their social security or VA benefits, reducing them to the point where it’s tough to live. The answer to this question is, unfortunately, more complicated than most realize. Let’s explore what happens when a debt collector wishes to garnish the social security disability benefits you receive, whether it can happen, and what you can do.

Can a Judgment Garnish Social Security Disability Benefits?

The easy and quick answer to this question is, “no.” In general, a debt collector cannot simply garnish, attach or otherwise take away your VA or Social Security disability benefits. There are laws under the U.S. Department of Treasury which provide automatic protection against the ability to garnish Social Security disability benefits.

These rules cover not just disability, but Social Security retirement benefits, Supplemental Security Income (SSI), veterans benefits, benefits from Federal Railroad retirement, sickness or unemployment, Civil Service and Federal Employee Retirement System (FERS) benefits. However, there are exceptions and limits to these rules about which you must be aware.

Two Months of Protection

First, the bank or credit union that holds your account must protect any benefits over the past two months. If there are more than two months’ worth of benefits in your account, the bank can freeze or garnish that extra money. For example, if you get $1,000 every month in SSDI, and a creditor garnishes your accounts, the bank must to allow you to use any money deposited within the last two months, up to $2,000. Anything more than that, it can freeze.

Prepaid Card Benefits

Many people these days choose to receive their benefits on a prepaid debit card rather than having them deposited into a bank account. Benefits loaded onto a Direct Express or other prepaid cards receive the same protection as money in a bank account.

Protection Exceptions

There are certain exceptions to protected money. Child and spousal support and government debts, for example, can sometimes be subject to garnishment for things like back taxes, federal student loans, child support and the like. Some benefits, however, such as SSI, still receive protection from these debts.

In addition, the bank does not have to protect benefits if you receive a physical check which you then deposit into the bank. That means that if you want the two months of protection, you must sign up for direct deposit or pre-loaded card distribution of your funds.

What Can I Do if My Accounts Are Frozen?

If your accounts are frozen or garnished, the law requires the bank to send you a notice that this has happened. The notice should explain the court processes you’ll need to go through to claim exemptions and get your money released again.

A judge will then make the determination whether the bank should turn the income over to the debt collector. Always be sure you tell the judge where your money comes from. This will factor heavily into their decision. Even if the funds are more than two months old, in some cases you can still appeal to the courts to have them returned and freed up for use.

The reason for this is that the purpose of Social Security income is to help people who need that money to make ends meet. It’s not designed to give you extra money. Since this money is considered to be, in some ways, essential to survival, it is generally held to be exempt from garnishment and freezing by creditors or bill collectors.

Working with a Social Security Disability Attorney

If a debt collector has obtained a judgment against you and attempted to freeze or garnish Social Security disability benefits that you count on to make ends meet, you don’t have to deal with it alone. The right Social Security disability attorney can help you to get your money unfrozen and get you access to it once again.

At The Law Offices of Dr. Bill LaTour, we focus on Social Security cases like yours, involving SSDI, SSI, VA benefits and others. Give us a call for a consultation about your case today.

About The Author

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Mitch Grissim is a Tennessee personal injury attorney and lead partner of Mitch Grissim & Associates in Nashville, Tennessee. Mitch has been practicing law since 1981 and is a member of the Tennessee Bar Association as well as the American Bar Association.

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