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CAN YOU COLLECT SOCIAL SECURITY IN SPITE OF PAST DUE DEBTS?

So you have past due debts.  Can you still collect Social Security disability benefits?  Can your creditors seize your benefits to satisfy loans or debts that are past due?

In most cases, you can collect Social Security benefits and past due debts or defaulted loans will not interfere.

For example, if you owe past due credit card debt, the card company cannot seize your Social Security benefits to pay the debt.  If you defaulted on a bank or car loan, your Social Security cannot be seized to pay those debts. The same is true for most other private debts.  Social Security assets are protected. However, there are exceptions.

I do want to talk about 2 things that are important footnotes to this topic.  One, what type of debt is NOT protected?  Two, what can you do to further protect your Social Security benefits from debtors?

1.  WHAT TYPES OF DEBTS ARE NOT PROTECTED?

Some types of debt are not protected and can result in seizure of Social Security benefits.

Federal Tax Debt.  The IRS may garnish or seize Social Security benefits for past due federal tax.

Government Loans.  Certain loans made or guaranteed by the US government are not exempt.  Social Security benefits may be seized to pay past due student loans and certain other federally guaranteed loans.

Child Support and Alimony.  These are other examples of debt that can subject you to seizure of Social Security assets, subject to a court order. 

Criminal Restitution.  If you are convicted of a crime and a court orders you to pay restitution to the victim, Social Security assets can be used.

2.  HOW CAN YOU FURTHER PROTECT YOUR BENEFITS?

Since only Social Security benefits are exempt from garnishment or seizure for debts, it is important that you can prove that your money came from Social Security.  The best way to do this is to have one dedicated account into which Social Security benefits--and only Social Security benefits--are deposited.

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Disclaimer:  This is not intended as legal advice.  I am in no way acting as your lawyer or legal representative.  If you have specific legal concerns or questions, contact an attorney who is licensed to practice law in your state or jurisdiction. Do not depend on this or any internet posting to make important decisions.

 
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