Can Social Security Payments Be Garnished?

by Francine Huff
October 31st, 2008

With so many people falling behind on their bill payments, people who receive Social Security may be wondering if their creditors will come after them by garnishing their wages. The good news is that Social Security benefits are protected from being seized by most creditors such as mortgage lenders, credit card companies, and auto lenders. The bad news is that if you owe the U.S. government money, your Social Security payments can be garnished. Money can also be seized if you owe child support or alimony.

Tax debt can be collected by Uncle Sam by garnishing up to 15% of your monthly Social Security benefit. That can occur until your tax debt is paid in full. However, that doesn’t usually happen unless you’ve already been notified about paying back taxes and there’s a court order instructing that benefits should be garnished. “We have to be notified that there’s an appropriate levy,” Jane Zanca, a spokeswoman for the Social Security Administration told Newsday.

However, the AARP Bulletin reported recently that 20 financial institutions garnished thousands of credit card accounts with federal benefits during a 12-month period, even though it’s illegal in most cases. The article featured a 61-year-old Social Security recipient who had his bank account frozen because creditors had a court order to garnish his funds. Because Social Security is direct deposited, it’s more more vulnerable to being frozen in a bank account.

If you do owe back taxes, it’s important to contact the Internal Revenue Service to set up a payment plan to avoid having your benefits garnished. And if you think you’re being unfairly targeted by a creditor who is going after your Social Security benefits, it’s important to get legal help.

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