Can a Creditor Garnish Social Security?

When ordinary creditors, such as a credit card company or car lender, file a lawsuit against you and obtain a judgment, they can take your wages through a wage garnishment and can take the money in your account through a bank levy.  But can the ordinary creditors take your social security?  Ordinary, non-government creditors cannot take social security income through a wage garnishment nor can they do a bank levy and take your Federal benefits that have been deposited into your account.  Here’s why:

Can an Ordinary Creditor Garnish My Social Security Income?

Pursuant to federal law, social security income (SSI) is exempt (protected) from a wage garnishment, and is exempted from a bank levy by ordinary creditors.  In fact, ordinary creditors cannot use any judgment collection remedy to take your social security income.  That means that an ordinary creditor cannot garnish your SSI by serving a wage garnishment order upon the Federal Government and cannot serve a bank levy upon the financial institution where you deposit your SSI income.

Government As Creditor

But what if your creditor is a government entity?  There are certain government debts that can be collected through the garnishment of SSI.  The most common of these includes back taxes to the IRS, federal student loans, and VA loans.  If you don’t pay these types of debts, your social security benefits can be garnished through a government or IRS social security garnishment and any benefits that have already been paid to you and deposited into your bank account can be levied upon and seized by the IRS or other government creditor. Past due child support and alimony are another example of a type of government debt that can be collected by garnishing your social security or doing a levy on the account where your benefits are is deposited, though it is less common for the government to do bank account levies to collect domestic support obligations.  If it decides to take your SSI, typically the Federal Government will simply do a garnishment and deduct a certain amount and then sending you the remainder in the form of a smaller check or direct deposit of your benefits.

How Much Is Garnished?

When your benefits are garnished, typically 15% of check or direct deposit is taken each month until the debt is paid in full.  This is not as harsh as an ordinary wage garnishment, in which 25% of your wages are garnished, but it still is a significant drain on your income.  Depending on the amount of the garnishment, the 15% garnishment per check may last for many years to come.

Levy on Funds Deposited in an Account

In some situations, the government will do a levy your bank account. The IRS especially, has been known to frequently levy and take the money deposited in your account, even if it is social security income, in repayment of back taxes. Remember, however, that ordinary creditors cannot levy on your account in which only your social security is deposited?  If a creditor does a bank levy and seizes this type of benefit that was deposited into your account, you need to have your lawyer file appropriate paperwork with the San Diego sheriff or the court and request for the return of your money. And if an ordinary creditor is threatening to levy on your bank account in which your benefits are deposited, your lawyer should provide them with a formal written notice to cease and they could be held accountable for unlawful collection practices.