Can debt collectors tap Social Security benefits?
  • Tuesday, November 20, 2018
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Can debt collectors tap Social Security benefits?

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Dear Savvy Senior: Can my Social Security benefits be garnished if I have some outstanding debts? I just turned 62 and would like to start collecting my retirement benefits. — Worried Retiree

Dear Worried: Whether your Social Security benefits are garnishable or not depends on whom you owe. Banks and other financial creditors, for example, can’t touch your Social Security checks. But if Uncle Sam is collecting on a debt, some of your benefits are fair game. Here’s what you should know.

Creditor protections

If you have credit card debts, medical bills, unpaid personal loans or pay day loans, you’ll be happy to know your Social Security benefits are safe from your creditors. Section 207 of the Social Security Act prohibits debt collectors or a bankruptcy court from dipping into your bank account to take Social Security money for purposes of paying off what you owe.

Supplemental Security Income (SSI), veterans benefits, federal employee and civil service retirement benefits, and benefits administered by the Railroad Retirement Board Administration can’t be touched either.

But be aware your creditors can still take legal action against you to recover what you owe them, and depending on your state’s law, they may be able to tap into other allowable assets.

Government garnishment

If, however, you owe money to Uncle Sam, it’s a very different story. The federal government can garnish a portion of your Social Security benefits for repayment of several types of debts, including federal income taxes, federal student loans, state-ordered child support and alimony, nontax debt owed to other federal agencies, defaulted federal home loans and certain civil penalties. (If you receive SSI, those benefits cannot be garnished under any circumstance.)

If you think your Social Security benefits might be raided to pay overdue bills, you need to address the problem — don’t ignore it.

Get help

Consider contacting a nonprofit financial counseling agency, which offers free and low-cost services on managing financial problems. To locate a credible agency in your area, use the National Foundation for Credit Counseling website at NFCC.org or call 800-388-2227.

You also need to make sure you’re not missing out on any financial-assistance programs. The National Council on Aging’s website (BenefitsCheckup.org) contains a database of more than 2,500 federal, state and local programs that can help seniors with prescription drug costs, health care, food, utilities and other basic needs.


Jim Miller is a contributor to NBC-TV’s “Today” program and author of “The Savvy Senior.” Send your questions to Savvy Senior, P.O. Box 5443, Norman, OK 73070; or visit savvysenior.org.


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