Garnishment of SSDI by Creditors

Massachusetts Attorneys Advising Social Security Applicants

If you have recently found yourself out of work due to a disabling injury or health condition, you may be finding it difficult to keep up with medical bills or credit card payments while you wait for your Social Security Disability Insurance (SSDI) to be approved. If you are facing calls from debt collectors and creditors, and the possibility of wage garnishment or judgments against you, you may be wondering what impact this could have on the benefits you do receive. The fortunate answer is that SSDI benefits are generally protected from garnishment. The Social Security lawyers at Kantrovitz & Associates, P.C., can advise Massachusetts residents on how to protect their disability payments from the reach of debt collectors.

Protecting Your Benefits against Garnishment by Creditors

As a general rule, federal benefits are exempt from garnishment by debt collectors and creditors under federal law. Although your SSDI benefits are wages of sorts, they are exempt from collection because the law recognizes that they are payments that may be necessary for obtaining fundamental needs and maintaining basic living standards. However, there are exceptions to this broad rule. Most importantly, the federal government itself may still garnish SSDI benefits if needed to recover money that is owed to it. This includes things such as back taxes or student loan payments. Another exception is for the payment of overdue child support, which may also be garnished. However, it is important to note that while these types of payments may be taken out of SSDI benefits, they cannot be taken out of Supplemental Security Income (SSI).

Although SSDI payment should be protected from garnishment, this is not always the reality of what happens. Writs of garnishment are generally served on the banks where an individual may have an account. When income comes into that bank account, it may be taken out by the bank and paid to the creditor to which garnishment is owed. Despite the fact that SSDI payments are protected, many banks may fail to inquire into the source of income they receive in a bank account, and they may instead pay the money to the creditor without further inquiry.

In order to combat this problem, a federal law was passed in 2011 that requires banks to evaluate whether the money contained in a bank account includes Social Security funds. If the account receives funds from this source, those funds cannot be frozen or removed from the account. This means that if a bank is properly following the law, your SSDI benefits should not be garnished from your accounts to satisfy a creditor, unless it is for the federal government or child support payments.

Seek Legal Guidance in Massachusetts for an SSDI Claim

Although your SSDI benefits should be protected when they are deposited into your bank account, this is not always the case. Fighting against the creditors that have taken these payments, or the banks that have mistakenly allowed them to be garnished, can be overwhelming and time-consuming. At the Massachusetts law firm of Kantrovitz & Associates, P.C., our SSDI attorneys understand the federal laws that protect your payments and can work with you to remedy any funds improperly taken by creditors. Based in Boston, we represent claimants throughout Plymouth, Norfolk, Essex, Suffolk, and Middlesex Counties. Contact us at (800) 367-0871 or online to set up a free consultation.