Social Security Disability benefits help many disabled St. Louis residents meet their financial responsibilities. SSD income, Supplemental Security Income, Veterans’ benefits and other government benefit programs are protected from creditors in most cases. Details about those protections can be found in Section 207 of the Social Security Act.

Unfortunately, creditors historically circumvented the law by waiting for the money to reach an SSD benefit recipient’s account where it could be garnished by the creditor directly. However, this method was stopped four years ago thanks to a federal regulation.

Residents of St. Louis should know certain exceptions to this rule exist. Garnishment of SSD benefits, VA benefits and SSI can be ordered in the following cases:

  • Federal income tax arrears
  • Delinquent child support or alimony
  • Restitution for crime victims as ordered by the court
  • Debts owed to federal agencies such as for a student loan

A recipient of SSD benefits should know that protections from garnishment are not applicable if the money is deposited directly and the deposit is more than two months old. The funds can also be garnished if the money has been transferred from one bank account to another.

Unless one of the above exceptions applies, recipients of SSD benefits and Supplemental Security Income have a legal right to have those funds protected from seizure by creditors. In some cases creditors who violate the law can be required to repay the money. An SSD or SSI recipient who believes their benefits were illegally seized should consider talking with an attorney about their potential remedies.

Source: MarketWatch.com, “Think Social Security is protected from garnishment? Think again,” Andy Landis, Feb. 20, 2015