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Can Social Security Benefits Be Garnished to Pay Debts? We Explain 3 Ways Social Security Benefits Can Be Garnished Updated 2019

In the event that leaser’s and bill gatherers are harassing you for cash, you may ask yourself: Can Social Security be garnished? The answer is: It relies upon to whom you owe cash. Banks and other money-related lenders can’t touch your Social Security advantages, yet when the legislature is gathering on an obligation, those assets are a reasonable diversion.

The government can garnish your SSI for reimbursement of a few sorts of obligations, including elected pay charges, elected understudy advances, child support and divorce settlement, non-tax obligation owed to other elected organizations, defaulted home advances and certain common punishments. Supplemental Security Income can’t be embellished under any condition.

Meeting The Qualifications

“The main way [for the government] to get SSI back is that occasionally Social Security will pay it back in light of the fact that they discovered you aren’t qualified for it,” says Martin Hoffman, senior accomplice in the law workplaces of Hoffman, Larin and Agnetti P.A., which is located in South Florida.

What You Can Lose

Among the administration lenders that can snatch a bit of your Social Security check, most bill collectors have a place with the IRS. By means of the Federal Payment Levy Program, Social Security benefits are liable to a 15 percent toll to pay reprobate duties. Dissimilar to non-tax obligations for different offices, for which the main $750 of your month to month advantages are untouchable to garnish, the IRS can take its 15 percent cut, paying little heed to how minimal expenditure you’re left with.

Paying Back Student Loans

Once the IRS has sent its last notice of an expectation to collect, you have 30 days to make installment courses of action before the office begins docking your month to month benefits. In the event that you owe cash on an understudy credit, it doesn’t make a difference to how long ago you were in school. A 2005 U.S. Incomparable Court case (Lockhart v. the U.S.) decided there is no statute of constraints on Social Security balances to reimburse understudy advances. The legislature can shave off up to 15 percent, as long as it doesn’t drop lower than $750.

Image result for divorce settlement illustrationsDivorce Settlement Payments

Divorce settlement cases are prepared through the national Court Ordered Garnishment System. In these circumstances, the greatest lessening to your advantages relies on upon the state where you live. The garnishment is restricted to either the most extreme permitted under state law or the greatest under the Consumer Credit Protection Act, or CCPA, whichever is less. Per the CCPA, you can hypothetically lose a large portion of your advantages in the event that you are supporting a kid or mate. Notwithstanding the one required in the court request; 60 percent in the event that you’re not supporting another child or mate; and up to 65 percent if the first court-requested backing is over 12 weeks behind.

Getting Out of Bills

For other obligations, you might have the capacity to arrange an agreement to pay not exactly your full bill. In the event that you are genuinely strapped for cash, know that the IRS has strict qualification rules for this plan, called an Offer in Compromise, and charges a $186 nonrefundable expense to apply.

Who Can Garnish My Social Security Income 

It is a little-known fact that private creditors can garnish the money in your bank account to collect on the debts you owe them. But what if I don’t want my social security garnished by creditors. The definition of social security garnishment includes the fact that you are in good standing from private creditors trying to come after your social security benefits vs. the federal government. Why? Because legally creditors cannot touch any part of your federal income benefits. To help in this situation where your social security income benefits are directly deposited into your account, there is a new law whereby government income benefits are “tagged” or identified by the bank. This means that whatever portion of your savings that make up government funds, cannot be touched by creditors.

Oh No, Is There Nothing Sacred?

Now I find out that my Social Security income can be garnished. I worked for many years to pay into this system, and now my income is not safe! What is the definition of social security garnishment? Apparently, if you get into debt with the federal government or there is a civil judgment against you, a portion of our Social Security income can be garnished by Uncle Sam.

Hands Off! 

Here are some facts about social security garnishment activities. First, there are exceptions, like regular creditors cannot take any part of your Social Security income. Also, if you are receiving Social Security Supplemental Income (for disability), even Uncle Sam cannot garnish it. However, if your creditor is the federal government, there are certain debts that must be repaid to them, through garnishments. For example, if you owe the IRS, they can take no more than 15% of your monthly social security income through an employer to pay for any federal income taxes you owe. If your monetary benefits fall below $750 per month, then the IRS will only garnish that amount that makes it exceed the $750 per month.

What If I Don’t Want My Social Security Garnished? 

There is a little loophole that exists involving the definition of social security garnishment. This is when Uncle Sam has your bank freeze your account and you will have to go through a lengthy process to prove that some of your savings should be exempt, like your social security benefits. However, Uncle Sam will forgive all or part of a defaulted loan if the person is severely disabled or if they have a severe long-term medical issue.

Debts That Are Subject To Garnishment 

The Social Security Act (42 U.S.C. 407 – Section 207) protects Social Security income benefits from garnishment by the federal government, except when added facts about social security garnishment involve the repayment of the following types of debts:

  • Alimony and child support: if you owe child support or spousal support, either past or present, then you could lose nearly 50% to 65% of your federal income benefits. The percentages are set by the state where you live and your case is handled by The Federal Wage Garnishment Law. The garnishment amount, lesser or higher is set by the state or the Consumer Credit Protection Act. Where children are involved, a court hearing can be held, but not until after a garnishment plan has begun. The parent being garnished upon can state why their wages should not be attached. Some reasons include that they can not live on the amount that is left or that the child in question was still in the custody of the parent being charged or if you are in arrears more than 12 weeks.
  • Civil penalties: civil penalties are fees assessed by the IRS like late filing fees, failure to pay late taxes, or tax fraud penalties.
  • Federal home loans that have been defaulted upon adds several fees to the amount already owed. You could wind up losing your home.
  • Federal income taxes: 15% of your Social Security benefits can be taken each month until the debt is paid in full. The government uses the Federal Payment Levy Program to garnish your payments.
  • Federal student loans: Uncle Sam could take 15% of your income benefits.
  • To withhold and pay other federal agencies for a non-tax debt owed to their agency according to the Debt Collection Improvement Act

Garnishing Wages To Satisfy SSA 

Another exception for the federal government not to touch any Social Security benefits involves death benefits or benefits paid to children. When the federal government prepares to garnish your wages to answer for your debts to any of their agencies, they will notify your employer.

Related imageBut What If I Don’t Want My Social Security Garnished?

Unfortunately, you do not have a say in it! Do not worry, however, when the government is ready to levy any part of your income benefits, you will receive several notice letters. Upon receipt of this correspondence, you will have two months to make payment arrangements. If, however, your employer has not received a federal government notice letter about withholding your disposable salary rather than social security income, then take this window in time to contact Uncle Sam to quickly make out a repayment plan. You can also try to file for a waiver or ask for a plea of reconsideration. But, when your employer receives a notice, which is about the same time you receive your notice, an action is taken and your garnishment will remain intact until your debt is paid.

Will This Cause Me To Lose My Job?

Don’t worry about your job, the law states that an employer can not fire an employee for having the government garnish their wages. These are some of the facts about social security garnishment that helps Uncle Sam not look like a grouch. There are various repayment plans depending on the arrangements you may with each agency. For example, the IRS does have strict rules about repayments, but they will work with you even though you may be deep into default. The same is true for federally funded student loans.