Social Security benefits are an essential part of the economy. About 90% of Americans aged 65 and above receive Social Security benefits monthly.
Generally, federal and state statutes protect these benefits from being taken by creditors, though there are a few exceptions.
However, some Social Security benefits like garnishments and bank levies receive no protection against creditor actions.
The question is, can an attorney garnish Social Security benefits? The short answer is no.
When a lawyer get you approved for benefits, the SSA deducts and sends their payment for legal services directly. That means your lawyer does not need to garnish your Social Security benefits.
This post will help you understand garnishments and how to protect your Social Security benefits.
What Is Wage Garnishment and How Does It Work?
Here is how garnishments work. A creditor can sue you if you fail to clear a debt. If they win in court, they will receive a judgment, a type of court order requiring you to pay the debt in full.
A creditor who has won a judgment against you may pursue the debt through actions like levies and garnishments. The use of the phrases garnish and levy vary per state laws.
For this post, garnish means collecting a percentage of your income, benefits, or other earnings before you have it.
Levy entails taking money from an account, such as a bank or savings account, from which you have previously received benefits or other revenue.
Collection efforts like phone calls and letters require you to remit payment willingly. But with garnishments and levies, creditors can take cash directly from you without your permission.
Most creditors can only utilize these tactics after obtaining a judgment against you. However, no judgment is necessary for some debts, such as overdue child support or delinquent taxes.
Types of Social Security Income
The Social Security Administration (SSA) offers four primary types of Social Security benefits:
- Retirement income: These payments are available to retired workers who are 62 years old or older. The benefit amount you qualify for depends on age, preretirement revenue, and the number of years you worked.
- Social Security Disability Income (SSDI):These are benefits disbursed to eligible workers who can no longer work because of a disability.
- Supplemental Security Income (SSI): These are benefits afforded to those who are too old or disabled to work full-time.
- Survivor’s benefits: These are payments given to the surviving spouses and children of eligible departed workers.
The law protects social security benefits more than salary and other income forms. However, in some circumstances, creditors may still be able to seize Social Security benefits, as explained below
Garnishment: Taking Benefits Before You Receive Them
Under federal and most state laws, creditors cannot garnish your Social Security before you get them. That includes almost all private creditors like banks and credit card issuers.
SSI benefits are the most protected. The SSA can only garnish SSI benefits when you receive an overpayment.
For other forms of Social Security income, creditors may garnish your benefits for the following debts. And there are limits on how much they can garnish in each case.
- Overdue criminal restitution payments: Based on the laws of your state, up to 20% of your benefits can be subject to garnishment.
- Delinquent alimony or child support obligations: The amount subject to garnishment depends on your state’s laws, but it cannot be more than 60% of your benefits. The limit rises to 65% if you are over 12 weeks late.
- Overdue federal taxes: Up to 15% garnishment of your full benefit for federal taxes.
- Delinquent debts owed to other government organizations: These debts include defaulted student loans. The federal government can deduct up to 15% of your benefits but cannot lower your payment below $750.
Bank Levy: Taking Benefits After You Receive Them
Most creditors cannot legally garnish your Social Security benefits before you get them. Generally, they cannot seize your benefits even when credited into your checking account, but the regulations are somewhat complex.
Benefits that are automatically protected
Before a bank deducts funds from your account, it confirms there was no Social Security benefit deposit within the past two months.
If so, the total Social Security benefits amount credited within this period and other qualifying federal benefit payments receive automatic protection from creditors.
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There is no arbitrary limit to the amount protected by the automatic rule. The rule applies even if it is a joint account you own with another person or if it has funds from other sources.
However, there are limitations on what is automatically protected:
- The automatic protection rule protects benefits directly credited into the account or deposited only directly into a benefits card. Benefits transferred from another account are not automatically protected.
- Benefits are not protected if they were credited two or more months ago.
- Only the protected amount, which equals the sum of all federal benefit deposits made in the previous two months, is eligible for automatic protection. If the funds in your account exceed this, the extra money can be subject to levy.
Benefits protected under state law
If your Social Security benefits are ineligible for automatic protection, you may still protect them through your state’s exemption legislation.
Most states have legislation that allows Social Security benefits some level of protection. Yet because these safeguards are not inherent, you have to take measures to enforce them.
You must first inform the court that ordered the levy that the funds in your account are exempt (protected). Then, you have to provide evidence to the court proving that the funds in your account meet the requirements for the exemption.
It would help if you acted fast to stop the creditor from receiving your benefits. When the court establishes whether the funds in your account are exempt, your bank account will likely be frozen.
Demonstrating that your account is eligible for protection can be challenging if your Social Security benefits are credited alongside other funds from other sources.
The best way to avoid this is to have Social Security benefits credited into a separate account and keep that account apart from any other financial assets.
Benefits not protected against bank levies
The same creditors with the right to garnish your benefits before you get them also have the right to levy money from your bank account.
Creditors can withdraw Social Security benefits directly from your bank to take past-due payments for federal debts, alimony, child support, and other debts. The automatic protection and most state exemption rules do not apply to these debts.
But there is an exception when it comes to SSI benefits. Without your permission, no creditor—not even the SSA—can withdraw SSI benefits from your account.
You may need to substantiate that the funds in your bank account are SSI income in specific circumstances.
Bankruptcy: An Alternative Way to Protect Social Security Benefits
Filing for bankruptcy may temporarily protect your benefits from creditors if your Social Security payment is not eligible for other safeguards.
The automatic stay suspends all collection efforts, including garnishments and bank levies, as soon as you file for bankruptcy.
You can discharge or eliminate your debt in bankruptcy. Even though certain debts, like past-due child support, cannot be dismissed, declaring bankruptcy allows you to negotiate payment terms with creditors and prevent a levy or garnishment.
So, can an attorney garnish social security benefits? The bottom line is that only the federal government has the right to garnish your Social Security benefits.
If you are at risk of garnishment from your attorney, seek alternative legal assistance. At Legal Giant, we can link you with an experienced lawyer who can advise you on protecting your benefits.
Contact us at (833) 641-1650 for a free, no-obligation consultation today.