Seniors in Credit Crisis: Can they Garnish a Social Security Check?

With so many feeling the crunch in today’s economy today, it’s not surprising that some who receive Social Security benefits are among those who have defaulted on credit cards and other debts.

While other sources of income may have dried up, most felt secure in relying on those government checks. Unfortunately, some senior citizens and individuals receiving Social Security Disability income have been shocked to find that past creditors had taken their money.

Isn’t there a restriction against garnishment of Social Security benefits?

Well, yes there is. But as with most things, it isn’t foolproof.

Section 207 of the Social Security Act protects Social Security benefits from assignment, levy, or garnishment, with 5 exceptions. Other than Section 459, which allows benefits to be garnished to enforce child support or alimony obligations, those exceptions deal with debt owed to the Federal Government. And even then, under the Tax Payer Relief Act of 1997, the IRS may not take more than 15% of a person’s Social Security benefit per month.

So how can creditors take Social Security benefits for unpaid debts? First, they must obtain a judgment against the consumer. Then they can garnish funds from that consumer’s bank account.

The government’s obligation to protect these benefits ends when the check is delivered to the recipient. However, they do continue to be protected under Section 207 as long as they are identifiable as Social Security benefits using normal banking practices.

Banks don’t keep track of the source of your funds – so unless you tell them, they won’t know that the money in your account comes from Social Security.

Consumers should get a letter or other notice when a court has issued a garnishment order against a bank account. This notice will provide instructions for notifying the court that the money is exempt from garnishment.

However, as many citizens have learned, those letters don’t always arrive as expected. Even if the letter arrives, it may arrive too late to respond before the deadline. They learn that their money is in danger only after it has been taken.

Since many citizens receiving Social Security benefits need those funds for daily living expenses, it becomes vital to protect them. Three possible solutions are worth consideration:
• Separate accounts: Set up one bank account for nothing but Social Security payments. Make sure the bank knows that Social Security is its only funding source.
• Switch to receiving checks in the mail and use cash or money orders to pay your bills.
• Have your social Security benefits electronically loaded to a debit card not affiliated with a traditional bank account. This is the government’s Direct Express debit card. You can learn about it at:

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Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.