For those individuals that rely solely on their Social Security benefit check to live on, the notion of a bank garnishing a portion of that money can seem cruel at best – and, at worst, it can be downright terrifying. It is by no means an exaggeration to say that, for most, Social Security provides no more than a meager existence. However, there is precedence for such action.
Take, for instance, the case of a 78 year-old man whose Social Security benefits were garnished. The law firm that had the money deducted from his check stated that he could agree to pay $300 each month toward the debt that was owed, and they would return in full the amount taken. According to the American Association of Retired Persons (AARP), "Social Security recipients are often vulnerable to garnishments because many of them use electronic deposit, which makes it easier for banks to freeze accounts. Banks are obligated to comply with state laws regarding garnishment or risk huge fines." But, is garnishing an individual's Social Security benefits legal? According to Section 207 of the Social Security Act:
"The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law."
As a general policy, it's true that Social Security benefits are exempt from attachment. But there are exceptions, as noted in Section 6331 of the Internal Revenue Code. Enacted after the aforementioned Section 207, Section 6331 gives the Secretary of the Treasury the right to "levy or seize for collection of delinquent Federal taxes, property, rights to property, whether real or personal, tangible, or intangible and the right to make successive levies and seizures until the amount due, together with all expenses, is fully paid. Also included is the garnishment or similar legal process brought by an individual to enforce a child support or alimony obligation."
Currently, the U.S. Senate has pending legislation that would prohibit the use of federal funds to advertise or promote 'direct deposit' of payments to Social Security beneficiaries until reasonable garnishment safeguards have been put into place. In the meantime, if you've had your Social Security benefits garnished or attached in any way, or you're currently under threat of such action, the best thing that you can do is to be aware of your own rights. Know what's legal and illegal in your state of residence. One resource that can help is FairDebtCollection.com. Here, you'll find every state listed and the amount (if any) that each allows to be garnished from your income.
Individuals that have gone through the wage- and/or benefit-garnishment ordeal offer this tidbit of valuable advice: pay down your debts as much as possible, and do not have your Social Security checks automatically deposited into your bank account.