Many Washington residents who receive Social Security benefits may be wondering whether those financial resources can be spared from collections during a debt relief proceeding. Although it would be great to be able to provide a clear-cut answer, the fact remains that certain Social Security benefits could be fair game for wage garnishment, depending on the type of benefits and the type of debts in question. The difference in this case between Social Security Income, Social Security retirement benefits and Social Security Disability Insurance is absolutely critical to understanding your creditor protection.
First, it is important to note that SSI can never be garnished by any creditor, even the IRS. SSDI on the other hand, may be vulnerable to some wage garnishment, though it is also pretty heavily protected. The government is able to access SSDI to satisfy balances for related to child support, student loans, overdue taxes and other government-related costs. Social Security retirement benefits are similarly subject to creditor protection for everything but balances owed to the government.
For this reason, experts advise that even those Washington residents who are not going through a bankruptcy proceeding avoid mixing their Social Security funds with other money. Set aside a designated account for your Social Security payments. Experts say that it is much easier to prevent the government from illegally seizing your assets than to recover the money later on.
It is not always easy to determine whether your Social Security benefits will be subject to protection from creditors during your bankruptcy proceeding. That is why you need legal and financial experts at your side to help you manage your finances and get back on your feet. You deserve to keep as much of your Social Security income as possible!
Source: Credit.com, "Can a Debt Collector Come After My Social Security?" Gerri Detweiler, May. 23, 2014