Direct Deposit and Social Security: Not so Nice for Those who Owe
Jonathan Ginsberg posted an interesting article
on the National Association of Chapter 13 trustees web site this
weekend, that will be relevant to many of our readers as well. Social
security is now requiring all beneficiaries to set up direct deposit,
which means the resulted funds could become available to executing
creditors if there are any funds from any other source in the account as
well.
You might recall my blog about this some time back, which contains cites to some of the relevant law.
As my previous blog explains, Federal law provides that Social Security payments are exempt from garnishment from civil creditors. If, for example, a credit card lender sues you and obtains a judgment, that creditor cannot ask Social Security to withhold funds from your government check. While these protections do not apply with equal force to the IRS collecting a tax debt or a creditor collecting child support, all other creditors are not to touch social security funds under any circumstances.
As my previous blog explains, Federal law provides that Social Security payments are exempt from garnishment from civil creditors. If, for example, a credit card lender sues you and obtains a judgment, that creditor cannot ask Social Security to withhold funds from your government check. While these protections do not apply with equal force to the IRS collecting a tax debt or a creditor collecting child support, all other creditors are not to touch social security funds under any circumstances.
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