If you owe money for an old debt, such as child support, federal taxes,
a judgement, or even a credit card and you receive Social Security payments,
you may be wondering if your banking institution can take that money to
pay your outstanding debt. This is a good question.
As a general rule,
Supplemental Security Income (SSI) is protected by federal law, so if your SSI income is deposited
directly into your bank account, a creditor who has gotten a judgement
cannot execute it against your bank account to satisfy its claim, however,
there are exceptions.
Other Social Security Benefits
If you’re receiving
Social Security Disability (SSDI) benefits, or if you’re receiving Social Security retirement
benefits, then your account is not entirely protected by federal law.
The following types of claims can be satisfied with this money:
- Child support
- Student loans
- Other money owed to the government
Safeguarding Social Security Funds
As of May 1, 2011, the U.S. Treasury required that banks take certain steps
to safeguard Social Security funds, Veteran’s benefits, and Federal
Employee Retirement System benefits among others.
Essentially, whenever the federal government inserts what is called an
“electronic tag,” in all direct deposits of exempted payments,
the banking institution must follow these procedures:
- When a bank receives a garnishment order from the court, it has two business
days to review the account and determine if the money is exempt from seizure.
If so, those funds cannot be frozen or garnished.
- All tagged deposits made two months prior to the garnishment order are
protected from garnishment.
- The bank has three business days from receiving the garnishment order to
give the customer the date of garnishment, the creditor’s name,
and the protected and non-protected assets in the account.
Note: Despite the 2011 changes, Social Security payments
can still be garnished for child support or federal taxes. As always, if you’re
concerned about your Social Security Disability payments being garnished
to pay an old debt, you want to take action to protect them.
The best way to understand how an old debt may affect your Social Security
payments, is to discuss the details with an attorney from our firm.
Consult with a Dallas Social Security Disability attorney from The Zendeh
Del Law Firm to protect your rights.
Call today to set up your initial case evaluation!