Can Creditors Take Your Social Security Money?

What happens if you owe $10,000 in credit card debt, you can't afford to make payments on the debt, they sue you, and your only income is social security?

Clients whose only income is social security don't have a lot of wiggle room when it comes to how they are going to spend their monthly money. Most of them are afraid that if they get sued on a debt, the creditor is going to take their social security money.

Well, here's some really good news for people who only get social security benefits and no other income. Your social security benefits are totally exempt from any levy or garnishment by regular creditors. This means that if one of your creditors sues you and gets a judgment against you, they are not allowed to take even one penny of your Social Security benefits from you. That's because social security benefits are protected by law. Except for certain federal agencies, creditors can't garnish or seize social security benefits. It doesn't matter if they are retirement benefits, disability benefits, survivor's benefits, or SSI benefits. They are all exempt from attachment by creditors because of federal laws. This simply means that ordinary creditors like credit card companies, medical debts, loan companies, and utility companies can't take social security benefits under any circumstances whatsoever.

And it doesn't even matter if they sued you and got a court judgment against you. These protections apply to you at all times, and the judge can't order you to pay a judgment creditor out of your social security benefits. They are totally exempt and protected.

Furthermore, these protections continue to exist even if the social security money is deposited into your bank account. If it ever becomes an issue, you would have to prove that the money in your bank account came from social security benefits, so it's probably a good idea to have a special account where only your social security benefits are deposited.

Here's one important exception to this rule. Some government agencies are allowed to take your social security benefits in limited situations. SSI benefits can't be taken at all, but the federal government is authorized to withhold part of a person's social security payments for a few debts such as taxes and federally subsidized student loans.

Social security is also protected in bankruptcy. This means that money that can be traced to social security is either exempt or never becomes property of the bankruptcy estate.

If you are getting social security and you are considering filing for bankruptcy, contact us so that we can create the best strategy to make sure that your social security benefits are fully protected. Seymour can be reached , and Seymour would be happy to be your Underdog Advocate to fight for you and protect your rights.