Hands off, debt collectors!
Debt collectors aren’t supposed to be able to garnish your Social Security benefits.
Contrary to federal law, they still manage to do so.
Last summer, three senators asked the Social Security Administration’s Inspector General to investigate the problem. A report on the inspector general’s findings is supposed to be out in the coming weeks.
Meanwhile, the senators introduced the Illegal Garnishment Prevention Act. The bill, the trio say, “would prevent the U.S. Department of Treasury from promoting the use of direct deposit for Social Security beneficiaries until they put a stop to the illegal garnishment of government benefits from the bank accounts of private citizens.”
Legislation is good, but it may come too late if debt collectors are draining your account now. It can help to know your rights, though. They are:
A creditor or debt collector can’t make a claim on your future Social Security benefits. And if you deposit that money in the bank, they can’t pull the benefits then if it’s possible to identify the money as government benefits.
Your creditors can’t ask your employer to pull money out of your pension or 401(k), either. Once you deposit retirement money in a bank account, though, they can go after it.
Each state determines protections on IRA money. Maryland protects all IRA money from creditors.
There are always exceptions, of course.
If you owe child support or alimony, your Social Security benefits garnished.
And the IRS can always get its hands on your money if you owe back taxes.
Are you having problem with this issue?
