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Income Garnishment
Retirement Planning
Social Security

What if your only income is social security disability and you have to turn in your car can they garnish your social security?


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November 19, 2010 2:22AM


Social security disability is protected from garnishment in judgments. The only unknown I have in answering this is if the debt is for a student loan, or IRS related and or related to child support payments. Those types of loans/are not even protected if you file bankruptcy.

But if your social security income is put into a bank and you deposit other funds then a judgment can be made against the funds in that account as it is not virgin SSI money it is mixed funds and can potentially be seized. Or will cost you time and money (lawyer fees) to prove it is only SSI money.

If you need to protect you SSDI funds open a fresh account and set up automatic deposits into that new account, the NEVER, I repeat never ever deposit any non-SSI funds in that account. Never transfer money into that account from another account either (also important). This is very important i you need to cash check from time to time open a second account to deposit funds into, then spend down those funds while leaving you protected funds alone, worse case if a company gets a judgment against you and is allow possession of your bank account they can only touch the non-ssi account. Pay you rent out of the non ssi account, pay for food gas et.. until those funds are spent down then go back to paying you bills using you SSI account.

You may be required to open the account with a minimum deposit, you can open it with an actual SSI check or in my case I opened the account with $1.00 and the next funding was a direct deposit from Social Security. Worse case scenario if they claimed mixed funds, sure they can get a $1.00 from will cost them a lot in legal expenses to get that buck though.

More Information

Your question suggests you're asking whether a commercial creditor can garnish your Social Security check for the outstanding balance on an auto loan.

The answer is no. Only the federal government can garnish your Social Security check, and only for limited purposes, such as payment of child support, alimony, delinquent taxes, and debt to other federal agencies.

The problem, as the first contributor mentioned, is that collectors may freeze and levy your account after the check is deposited (or direct deposit posted). The Treasury Department planned to implement new rules in 2010 preventing banks from freezing an account that receives federal benefit deposits without evaluating the past 60 days deposits. They would be required to protect any amount equal to the non-attachable deposits (whether that money had already been spent or not). Unfortunately, there's been little mention of the procedure since May 2010.

Barring voluntary cooperation from your bank, you can file a "waiver of garnishment" with help from your nearest Legal Aid Society and get a court order stopping the action. You can also notify the creditor that the income is from Social Security, and protected by federal law, and ask the bank to unfreeze your account (all in writing). The process can sometimes take awhile, but you do have legal recourse, so don't allow unethical collectors to take advantage of you.

Your Legal Aid Society will not cost you a fortune in legal bills; if you can't afford to pay, they will assist you for free.

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