Can a lump sum social security disability payment be taken by your creditors?

UPDATED: May 20, 2013

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Can a lump sum social security disability payment be taken by your creditors?

I paid my bills faithfully until I got sick a few years ago. I could not work and had no money so I quit paying my credit cards. Since they have been turned over to collection agencies. I have just been approved for SS disability and will be getting a monthly check starting in 2 months but it will bearly cover my monthly bills now. I will also be getting a lump sum. I owe money to people that kept me afloat for the past 2 years. My house also needs work done on it. I just need to know if they can take my money? I really don’t want to file bankruptcy at all since it would take a big part of my money. I won’t be able to do file untill I get my lump sum and I am afraid they can take it before I could file.

Asked on May 20, 2013 under Bankruptcy Law, Indiana


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Good questions. Social security payments in and of themselves cannot be levied upon by judgment creditors. However, once the checks are deposited into one's checking or savings account the insulation they had from collection are now gone and the checking or savings account can be levied upon by the judgment creditor.

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