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Living on Social Security Disability Insurance (SSDI) means living on a fixed income. If that income is reduced by garnishments and levies, it can create an untenable financial hardship. Fortunately, there are steps you can take to limit or altogether avoid garnishment of your benefits.
An SSDI lawyer in your area will review your current financial circumstances and learn as much as possible about the possible debts you owe. Your lawyer will also take time to explain your relief options and determine how you can hold onto your disability benefits. They will also explain Social Security Disability benefits and wage garnishment and how it works.
Table of Contents
- What Is the Difference Between Having SSDI Benefits Garnished or Levied?
- Can Any Creditor Garnish Social Security Disability Benefits?
- Can Filing Bankruptcy Stop SSDI Wage Garnishment?
- Contact Our Social Security Disability Benefits Team
What Is the Difference Between Having SSDI Benefits Garnished or Levied?
Having your wages garnished means a creditor will take legal action to confiscate a portion of your income to satisfy a debt. They will receive their portion of your benefits before you receive your benefits yourself. Your benefits will be adjusted accordingly, leaving you with a smaller income than you would normally receive.
When your benefits or wages are levied, that means you have a federal tax debt, and the IRS is the entity that seizes part of your benefits. Only federal taxes are subjected to the levy process. If you also owe unpaid taxes to your state, it may pursue collection options, but it cannot levy your benefits.
Can Garnishments and Levies Deplete SSDI Benefits?
The short answer is no. The long answer is that the IRS can take 15 percent of your SSDI benefits, regardless of how much you receive each month.
If you are represented by a Social Security Disability lawyer, they will review your benefits for accuracy. Provide your lawyer with a copy of any written or electronic communication from creditors who threaten to garnish your wages. Your attorney can help you develop a plan to reduce or relieve your debts and avoid these harsh actions whenever possible.
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Can Any Creditor Garnish Social Security Disability Benefits?
While garnishments and levies are legal ways for creditors to obtain payment on your debts, not every creditor can take advantage of this legal option. The following debts can be recouped via wage withholding:
- Current or delinquent child support payments
- Current or delinquent alimony payments
- Federal student loan debts that you defaulted on
- Federal (but not state) back taxes
As noted, up to 15 percent of your benefits can be garnished to cover federal government debt. If you disagree with any of the garnishments applied to your benefits, your lawyer can help you dispute them.
Which Creditors Cannot Garnish My SSDI Benefits?
No creditors outside of the government agencies and support obligations listed above can seize your benefits. If an attempt is made to do so, inform your lawyer immediately. Private (non-governmental) creditors have other options, though, for financial recovery.
Up to a certain amount, these creditors can seize money in your bank account that was not deposited from SSDI. If you are concerned about this possibility (or are in the midst of it), your SSDI attorney can help you explore alternate repayment or debt cancellation options.
How Can a Lawyer Protect Social Security Income?
Living on a fixed income can be financially and emotionally stressful. When your income faces possible reduction, it can compromise your ability to meet your daily needs. If you are represented by an SSDI lawyer, they will assess your needs by assessing your current financial situation.
Your lawyer will also carefully review all communication regarding your debts and submit court and other relevant paperwork pertaining to your case. An initial review of your case with our team is cost and obligation free. It is a risk-free way to understand your options.
Can Filing Bankruptcy Stop SSDI Wage Garnishment?
Filing for bankruptcy can stop most types of creditors from pursuing your debt, ending phone calls and other intrusive methods of contact and debt collection. It can also discharge (or erase) the following types of debt:
- Credit card debt
- Collection accounts
- Medical debt
- Personal loans
- Utility bills
- Car notes
- Mortgages
- Past-due rent
- Civil court judgments
- Government overpayments
Some unpaid debts will be considered non-dischargeable, including certain federal government debts, meaning you will still owe these debts even after filing for bankruptcy. If you are represented by a bankruptcy lawyer, they will explain these distinctions to you.
What Other Relief Options are Available for Debtors?
The simplest way to circumvent possible garnishment is to remit payment for the debts you owe. Since this is not always a viable option, your lawyer will explain debt relief options, which can include:
- Credit counseling
- Debt consolidation
- IRS Fresh Start Program
- Payment plans
- Debt renegotiation
- Another debt management plan
Your lawyer will work with economists, financial planners, and other experts, as needed, who can examine your current financial situation and past debts. They can help you develop the best possible plan that allows you to retain the income you need at the same time you get debt relief.
Are SSI Benefits Protected From Garnishment or Levy?
SSD benefits also include Supplemental Security Income (SSI). SSI benefits are awarded to individuals with little or no income or resources. Because these governmental benefits are need-based, they are protected from any form of seizure. This includes federal tax debt and privately owed debts.
Contact Our Social Security Disability Benefits Team
If you have outstanding debts that could lead to the seizure of your Social Security Disability benefits, you need to know as much as possible about SSDI wage garnishment and how it works. Our client-focused law firm will explain your financial responsibilities and your rights as a benefits recipient.
Learn more about protecting your current income by contacting one of our Farmer & Morris Law, PLLC team members today.
