Can SSD payments be garnished?

UPDATED: Aug 17, 2011

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Can SSD payments be garnished?

At this time my wife can’t pay most of all of our debt due her having major surgery; recovery is up in the air right know. I had back injection. The problem we have had is we have fallen behind on all of our bills. We both are on SSD. We need to know if these companies can garnish our checks or will they just turn the debts over to collection? Would it be better for us to file bankruptcy  – Chapter 7 or 13. We are lost at what to do at this time.

Asked on August 17, 2011 North Carolina


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

First of all, bankruptcy is always an option if you are in dire financial circumstances, and it sounds as though you are. As for which chapter to file, a Chapter 13 is a repayment plan and it sounds as though you couldn't possibly enter into one at this point; you would need to consider a Chapter7 filing. While this is something that you can attempt on your own, it is technical and time consuming. You should really consult directly with a bankruptcy attorney. Since money is an issue see if Legal Aid is currently taking bankruptcy cases. if not,see if there is la aw school nearby to where you live; typically they run legal clinic that are /low cost. Additionally, you can contact the bar association in your county; it may have a list of attorneys that take cases for low income individuals.

As for the garnishment of your SSD, these payments are what is known as "exempt" funds. This means that they cannot be garnished by a creditors. There was a time that a creditor could freeze bank account in an attempt to get such money. If you did not object within a specified timeframe then the money would in fact be paid over by your bank even though the money was exempt.  But this is no longer the case. Now, if exempt funds are paid into an account via direct deposit, they cannot be frozen in your account (although other non-exempt money can be). So as long as you have direct deposit (that means that you do not deposit a check), your creditor cannot garnish your disability payments.

Note: Only 2 months worth of benefits are protected. Additionally, don't transfer benefits to another account or else the protection is void.

At this point you really need to speak with an attorney as to your situation.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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