In this video we're talking about how and when your Social Security benefit can be garnished by debt collectors. There are some specific rules, but not all creditors follow them.

The back story...When a client asked me if Social Security benefits could be garnished, I had no idea of the answer. I was determined to find out, so I reached out to my friend John Ross, an elder law attorney at Ross & Shoalmire for a qualified answer. He said, “Social Security Retirement benefits and Social Security Disability benefits can be garnished…but only in very limited circumstances. Unless the creditor is the federal government, or the debt is for alimony or child support, a Social Security benefit can’t be touched.” This was good news for my client since medical bills certainly didn’t fall into any of those categories. However, it did make me curious enough to want to learn more about how these other debts are collectable. Apparently, although federal debts are subject to garnishments, not all federal debts are subject to the same rules on how a benefit can be garnished. This could be noteworthy, so here are the rules:

All Federal Creditors (except the IRS)
If you owe money to any federal agency, and it is 180 days delinquent, that federal agency can garnish up to 15% of your monthly benefit amount. However, the remaining benefit amount must be at least $750 per month. If garnishing 15% leaves you with less than $750 per month, the agency may only garnish the amount that exceeds $750 per month.

IRS/Tax Debt
For the IRS, the limit is also 15%. One BIG difference is that they can do this regardless of whether that reduces the amount to below $750.00.

Child Support/Alimony
For child support and alimony, the amount of the garnishment is limited to the lesser of the amount permitted under state law, or the federal Consumer Credit Protection Act (CCPA).
Under the CCPA, garnishment is limited to:
50% of your benefit if you are supporting a child
60% if you are not supporting a child
65% if you are in arrears more than 12 weeks.

If your state law has lower numbers, then only the amount allowed by state law may be garnished.


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⚠I am not an attorney, SSDI advocate, or affiliated with the Social Security Administration or any other entity of the US Federal Government. I am a practicing financial planner, but I’m not YOUR financial planner and since I don’t really know you, I can’t give you advice. So please don’t take this video as specific advice for your specific situation. Consult your own tax, legal and financial advisors.