When it comes to whether a debt collector can garnish your Massachusetts Social Security benefits, the short answer is that it depends on who the debt is owed to.
Federal law provides strong protections for Social Security benefits against most private debt collectors. Under the Social Security Act, these benefits are generally exempt from garnishment and bank levies from private creditors. This means that credit card companies, medical debt collectors and personal loan providers typically cannot legally seize your Social Security funds to satisfy unpaid debts.
However, there are significant exceptions to these protections . The federal government can and does garnish Social Security benefits for certain types of federal debts. These include:
- Federal student loans in default
- Unpaid federal taxes
- Child support and alimony obligations
- Certain other federal debts
When garnishment is permitted, the government must still leave you with a minimum of $750 per month or $9,000 annually in most cases. This provision ensures that recipients retain at least some income for basic living expenses, regardless of their debt situation.
It’s worth noting that Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) receive the same protections as regular Social Security retirement benefits. However, SSI recipients typically have even fewer assets, making them especially vulnerable when facing debt collection.
Your bank is also required to protect up to two months’ worth of federal benefits deposited directly into your account. This “lookback period” means that when a bank receives a garnishment order, it must review your account history and protect the equivalent of two months of benefits from being frozen or seized.
While Social Security benefits may be protected in most cases, avoiding communication with debt collectors can still lead to legal trouble. Luckily, there are strategies you can use to help resolve your situation, including:
How to Get Rid of Debt in Collection
Debt settlement : This approach, which is also commonly referred to as debt forgiveness , involves negotiating with creditors to pay a lump sum that’s less than the full amount owed. Many creditors will accept 30% to 50% less than the original debt, especially if the account has been delinquent for some time.
Debt management : Credit counseling agencies can help you establish a debt management plan where you make a single monthly payment to the agency, which then distributes funds to your creditors. These plans often secure lower interest rates and waived fees, making repayment more manageable on a fixed income.
Hardship programs : Many creditors offer hardship programs for those facing financial difficulties, including seniors and disabled individuals. These programs may reduce interest rates, waive fees, or even forgive portions of the debt based on your circumstances. So, contacting your creditors directly to inquire about available hardship options can be a smart move if this is the type of debt you’re dealing with.
Bankruptcy protection : For those with overwhelming debt, filing for bankruptcy may provide relief. Chapter 7 bankruptcy can eliminate most unsecured debts within a few months, while Chapter 13 creates a repayment plan over several years. Social Security income is not counted in the means test for Chapter 7 qualification, which can make this option more accessible for benefit recipients.
The bottom line
If you rely on Social Security benefits, you generally don’t have to worry about private debt collectors garnishing your income. However, government agencies can still deduct money for certain debts, such as taxes and child support. It’s still important to try and get rid of your debt issues, however, as you could face other repercussions related to your unpaid debt. Fortunately, options such as debt settlement, consolidation or credit counseling can provide a path forward.
Should you be in the midst of a divorce or contemplating divorce, contact the Law Offices of Renee Lazar at 978-844-4095 to schedule a FREE one hour no obligation consultation.
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