Is Social Security Income Protected from Creditors?

Creditors sometimes go to court and get a judgment against the debtor. If this happens to you, your creditor can then take the judgment order to the bank, garnish your account and take your money.

According to federal law under 42 U.S.C. section 407 (a), your Social Security income is exempt from garnishment. This protection is not automatic and there are steps you need to take to be sure that you do not lose your money to the creditor. If you do one of the following, you should be able to save three months of your Social Security income from garnishment.

Filing an affidavit with the court

If you receive a notice of a hearing requested by your creditor, attend the hearing and provide the court and your creditor with information verifying that your income is exempt from garnishment. If you did not attend the hearing, you can still take measures to protect your Social Security.

As soon as you receive the notice of the judgment, prepare an affidavit and specifically identify the source and amount of the funds you claim are exempt. File the signed and notarized affidavit with the court and provide copies to your creditor and your bank. If you get a Social Security check and deposit it yourself into a bank account, it should be an account you use exclusively for your Social Security funds. It is much more difficult to identify funds as from Social Security if you co-mingle them with other funds.

Direct deposit

If you have your Social Security check deposited directly into your account, the burden is on the bank that receives the garnishment notice to investigate and see if the account has exempt funds directly deposited.

If you want to avoid the fear of losing your Social Security and other sources of income, you may want to explore bankruptcy options with bankruptcy lawyers at our firm.