2020 Best Invention

Can My Social Security Disability Benefits Be Garnished?

4 minute read Upsolve is a nonprofit tool that helps you file bankruptcy for free. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card. Explore our free tool


In a Nutshell

Garnishments and bank levies allow creditors to take money from you to pay a debt. Federal laws and the laws in most states provide special protections against these proceedings for Social Security disability benefits and other federal benefits. Certain types of debts, though, don’t qualify for these protections. If your benefits don’t qualify for any other protection, bankruptcy may offer at least temporary relief from collection efforts.

Written by Attorney Andrea WimmerLegally reviewed by Attorney Paige Hooper
Updated October 17, 2022


If you don’t pay a debt, the creditor could sue you and get a judgment against you. A judgment is a court document that says you owe a debt and orders you to pay it. When a creditor has a judgment, they have more options available to collect the debt, including garnishment and bank levy.

Federal laws — and may state laws — create special protections against garnishments and levies for Social Security disability income and other federal benefits. This article covers how garnishments and levies work, what protections are available, and what you need to do to use these protections.

What Are Social Security Disability Benefits?

Social Security Disability Insurance (SSDI) benefits are payments from the Social Security Administration to qualified workers who can’t work because of disabilities. Your eligibility for SSDI benefits is based on your age and on how many years you paid into the Social Security system. The amount of benefits you receive depends on your pre-disability income.

In addition to SSDI payments, the Social Security Administration also distributes retirement benefits, survivors’ benefits, and Supplemental Security Income (SSI). You may receive other types of Social Security benefits in addition to SSDI. The rules that apply to garnishments and levies are generally the same for all types of Social Security benefits. But there are a few additional protections for SSI payments.

Garnishments and Levies Explained

If you don’t repay a debt, a creditor or debt collector can sue you. If the creditor wins, they get a judgment against you. Creditors often use garnishments and bank levies to collect judgment debts.

In a garnishment, the creditor takes a portion of your income before you receive it. Wage garnishments are the most common garnishment proceeding, but garnishment can apply to other types of income, including SSDI benefits. In a bank levy, the creditor takes money you have already received out of your bank account.

Depending on your state, the words levy and garnishment could be used interchangeably to refer to either procedure. In this article, “garnishment” means taking part of your benefits before you receive them, while levy means taking benefits after you receive them. To take money from you using either levy or garnishment, a creditor must usually have a judgment against you. But a judgment isn’t required for some types of debt, such as unpaid child support or past-due taxes

Upsolve User Experiences

2,176+ Members Online
Tina Worley
Tina Worley
★★★★★ 7 hours ago
This tool was unbelievably helpful. During such a stressful time, this site really helped give me peace of mind at every step.
Read more Google reviews ⇾
greg cihla
Greg Cihla
★★★★★ 2 days ago
Upsolve is great. Non profit group of lawyers, here to help. Just filed chapter 7, very easy, thanks.
Read more Google reviews ⇾
Jack Drae
Jack Drae
★★★★★ 2 days ago
Very helpful, especially in a time crunch! I will refer to everyone I know.
Read more Google reviews ⇾

Disability Benefits and Garnishment

Federal Social Security laws prohibit most private creditors, such as banks and credit card companies, from garnishing your SSDI benefits. These protections are also found in the laws of most states. Exceptions exist for certain kinds of debts, including:

  • Back taxes (past-due taxes): The federal Treasury Department can take up to 15% of your total benefit amount.[0]

  • Delinquent child support or alimony: The maximum garnishment amount depends on your state law, but can’t exceed 60%[0] of your benefit amount (65% if your payments are more than 12 weeks behind).

  • Past-due criminal restitution payments: The maximum garnishment amount is up to 25%[0] of your total benefit, depending on your state’s laws.

  • Other delinquent debts owed to federal agencies: This includes federal student loans. The amount garnished can be up to 15%[0] of your benefit, as long as the portion you receive is still at least $750.

Disability Benefits and Bank Levies

SSDI benefits are protected from most garnishments and, in many cases, bank levies. Sometimes, these protections are automatic. Other times, you must take action to protect your benefits from a bank levy. And in some cases, your SSDI benefits are not protected from levies. 

Automatic Protection

According to a Treasury Department rule[1], before your bank can levy funds from your account, it must first check whether any Social Security benefits have been directly deposited into that account in the past two months. If so, the bank must determine the “protected amount.” This amount is either the total of all direct deposits of federal benefit payments within the past two months or your current account balance, whichever is less. 

Protection Under State Exemptions

If the benefits in your account don’t qualify for protection under the automatic protection rule, they might still qualify for protection under your state’s exemption laws. Every state has laws that protect certain kinds of property against garnishment or levy by creditors. Most states have exemption laws that offer some protection for SSDI benefits.

Protection under state-law exemptions isn’t automatic, though. If you receive notice of a bank levy, you must act quickly to notify the court that your account contains exempt benefits. You’ll need evidence to show that the money in your account qualifies for your state’s exemption. This is why it’s usually a good idea to keep your SSDI benefits in a separate account apart from your other money. A designated account makes it much easier to prove that all the money in the account qualifies for protection. 

When Benefits Aren’t Protected

For some types of debts, neither your state’s exemption laws nor the automatic protection rule prevents your SSDI benefits from being levied in order to pay them. These include back taxes, delinquent child support or alimony payments, past-due criminal restitution payments, and other delinquent debts owed to federal agencies. In other words, if a creditor can garnish your SSDI benefits, that creditor can probably also levy benefits from your bank account.

Bankruptcy Can Offer Additional Protections

If your SSDI benefits don’t qualify for any of the protections discussed above, bankruptcy could offer at least temporary protection from levy or garnishment. The Bankruptcy Code’s automatic stay provision immediately stops all collection actions. Many debts can be discharged, or eliminated, in bankruptcy. For debts that can’t be discharged, filing bankruptcy can still give you a chance to stop a levy or garnishment and work out a payment plan with the creditor.

If SSDI or other protected benefits are your only income source, you may be considered judgment-proof. Being judgment-proof means that your creditors don’t have a way to collect judgments against you. Being judgment-proof doesn’t mean that you’re protected from collection calls and notices. You still owe the debt — plus interest — and you could end up paying if your situation changes. 

Bankruptcy, on the other hand, may allow you to wipe out the debt for good. If you have limited income and assets, you’ll likely have no problem qualifying for bankruptcy and protecting your assets.

Let’s Summarize…

Garnishments and bank levies are two common ways that creditors can collect debts from you. Most, but not all, creditors must sue you and get a judgment against you to utilize these collection methods. Federal and most state laws prevent creditors from garnishing your SSDI benefits. There are exceptions for certain kinds of debt, including domestic support obligations, criminal restitution, and debts owed to the government.

Automatic protections prevent creditors from levying SSDI benefits from your bank account in many situations. Even if your benefits don’t qualify for automatic protection, you can usually protect them under your state’s exemption laws. If your SSDI benefits aren’t eligible for any of these protections, you could still protect your benefits by filing bankruptcy.


Sources:

  1. National Archive: Code of Federal Regulations. (n.d.). Code of Federal Regulations: Title 31, Subtitle B, Chapter II, Subchapter A, Part 212. National Archive: Code of Federal Regulations. Retrieved October 17, 2022, from https://www.ecfr.gov/current/title-31/subtitle-B/chapter-II/subchapter-A/part-212/

Written By:

Attorney Andrea Wimmer

TwitterLinkedIn

Andrea practiced exclusively as a bankruptcy attorney in consumer Chapter 7 and Chapter 13 cases for more than 10 years before joining Upsolve, first as a contributing writer and editor and ultimately joining the team as Managing Editor. While in private practice, Andrea handled... read more about Attorney Andrea Wimmer

Attorney Paige Hooper

LinkedIn

Paige Hooper is a seasoned consumer bankruptcy attorney with 15 years of experience successfully representing debtors in Chapter 7, Chapter 11 and Chapter 13 cases. Paige began practicing bankruptcy law in 2006 and started her own solo, multi-state bankruptcy practice in 2012. Gi... read more about Attorney Paige Hooper

It's easy to get help

Choose one of the options below to get assistance with your bankruptcy:

Free Web App

Take our screener to see if Upsolve is right for you.

Take Screener
10,706 families have filed with Upsolve! ☆
or

Private Attorney

Get a free bankruptcy evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →

News

    + Show Articles

    Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

    To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.