Is my social security and pension exempt from debt collectors garnishing?
I was forcibly retired last year and am paying 8 credit card bills -1 in collection - with an income of ss and pension only. I can't do it anymore. What do i do?
Is my ss and pension exempt?
—elliot
It sounds like you are asking what will happen if you stopped paying on all, or maybe just the account you already have in collections. The quick answer is that your social security income cannot be garnished at the source, and most pensions are exempt from garnishment too. You would first have to be sued, and a judgment entered in court, before there is any risk to your money from a debt collector. And what risk there is, given the sources of the income, would be when that money is on deposit in your bank account, so in the form of a bank levy.
If your situation reaches a point where you have to be concerned about how a debt collector will go about trying to collect on a judgment, you would then look to how much of your stuff (money in bank account, wages, personal property, car) is protected by state law. The amount of protection you have from creditors in your state may surprise you.
What state do you live in?
Bank Account and Wages – Limiting Your Risk from Debt Collectors
Before you react to how much risk you have if a creditor sues you in order to get paid, consider whether that can be avoided. Your not able to pay all 8 credit card debts today, so something has to give.
What if your credit card payment could be lowered, and fixed at a more affordable monthly amount?
Add up all of your credit card bills and then calculate two percent of that. Is that two percent much lower than what you are paying out to all 8 cards today? If it is, you are paying higher interest rates. If those rates are lowered (and fixed), would you be able to pay that amount consistently on your fixed income? If yes, read through the credit counseling section of my debt relief guide.
If roughly 2% of your consolidated credit card balances is out of the question, what about negotiating lower balance payoffs? Your credit card debts can be settle for less than what you owe once they reach a certain level of delinquency. If you are not making monthly payments to your credit cards, and saving up all the money you can instead, how long would it take you to pool together about half of your credit card totals?
If your answer is less than 36 months, settling these credit card bills may be the answer to avoid bankruptcy. Keep in mind that some creditors will accept settlement far lower than 50%. The review post about what major credit card lenders settle for is fairly accurate. Use that as a beginning guide to how much money you will need to settle with your banks.
You can post a list of your different creditors in the comment section below, with the balances as of today, and I can offer feedback about negotiation targets, timing, and prioritizing creditors who are the most likely to sue. Settling with the right creditors early can limit your risk of bank levy and property liens.
Put the Debt Behind You with Chapter 7 Bankruptcy
While bankruptcy is something most people want to avoid at all costs, I usually find they have not assessed the costs and benefits. While we talk about your credit card bills being affordable with credit counseling, or by settling for less above, chapter 7 bankruptcy is typically the ultimate in affordability.
Chapter 7 could cost you less than 2k from start to finish (I have seen costs less than 1k). Using bankruptcy you are able to discharge those credit card debts (and other bills), and once discharged, you remove any and all risk of being sued, or any type of bank levy, garnishment, and property liens.
You have to qualify for chapter 7 bankruptcy using an income means test specific to your state. And just like there are state exemption laws that protect you from debt collectors, there are state exemptions for what you are allowed to keep in a chapter 7 bankruptcy. If your stuff is valued at more than the exemptions in your state, you may look to a chapter 13 bankruptcy where you repay some, or all of the debt, over probably 5 years. But when it comes to people having to consider chapter 13, I have often found debt settlement to be a better alternative.
What if you just didn’t pay, and did nothing?
Some folks with too many bills, and not enough income and assets (such as being on fixed income from disability and social security), will stop making payments all together, and wait for whatever comes. If sued, and a court judgment entered, they already know they are not at risk because; their car and other personal belongings are protected by state law; they are not working in order to be garnished; wages are low enough in their state to be protected; live in a state where wage garnishment is not allowed; and funds like social security that are exempt are the only moneys deposited into their bank account.
Some people may feel that doing nothing is better than filing for bankruptcy, and there are many times I will agree. Check out the above interview I did with Eric Olsen, Executive director for HELPS. Eric and his team are available to help seniors, and those receiving disability and VA benefits, in order to protect themselves from all manner of debt collection:
This was a pretty long winded answer to a short question. My goal with this page is to bring the state exemptions from extra ordinary debt collection into focus. Anyone with questions or concerns about this topic can post in the comment section below. Please include the state you live in.
Need some personalized help?
I do offer a no cost initial consult to anyone trying to get their bearings on what to do about their particular situation. You can schedule the call using the Get Help tab at the top of this page.
I can usually offer actionable feedback in a brief call once I know the details of your situation.
You can post in the comments below anonymously, which I answer daily.
You can post in the comments of any of my YouTube videos.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
I am in Michigan. I have a few judgments against me and I am aware that my bank could be garnished. I was recently added as a signor to my church bank account as I handle the finances. Can the church account be garnished since I am a signor?
I would not feel good about having my name on that account if there were judgments against me.
I live in alabama I barley make on my ssite check it have a total of 6000 in credit card debt with several companies some are in collections not in court only one is they telling me they can garnish my skin and put a levy onot my bank account I can afford to pay this debt or have 25% of my skills garnish I would become homeless and starve and have no food to eat or cover my co-pays for meds,doctors,mental health thearphybrid I have no onexperience who can help can they do that to me since all I have is still and that’s all I have come to bank account and I don’t have lots of money in it I usually have 10 left every month in my account what do you surest I do and can’t afford attorneys have no property or car I would appreciate your answer with all my health problems and 3 mental illnesses they are driving me crazy and causing me issues with my mental health they never really be nice half the time please help me with some advice about all of this thank you very much
Even if they were to get a judgment, there is not much they will be able to collect from you, as your income is exempt, and you have no assets they can attach.
I’m on SSDI and have a home, I’m all caught up on with my monthly payments, but I just purchased a car three months ago, and so far I’m up to date on my car loan too, but I’m losing traction as we speak. They( Capital One Auto Loans), gave me the car loan, for nearly 24% interest, and $510 a month payments for 72 months, on a Honda Civic Ex.
I also have about $10,000 in credit card debt. I know I do not have to pay back the credit cards back, with a Cease and Desist. But I’d also like to keep the car as well, because it will take several months to try and save the money for another car. And it’s hard to get around Spokane, Washington, without one(a car), for that many months. What can I do to be able to keep the car, in this perdicamont. I know the repo man, is right around the corner. Please, is there an answer? Thank you!!
Unfortunately, if you cannot make the car payments, they are highly likely to repossess the vehicle and apply what they get at auction to your loan balance and try to collect the difference.
Hi i live in florida and recently received a letter from the court of a lawsuit to a debt collector , Im a divorced mother of 2 and currently pregnant and my only income is my child support payment from my previous marriage . i had to quit my housekeeping job in April due to complications with my pregnancy . My current boyfriend does help me pay my rent ,light and car bill etc but we aren’t married legally or live together . Can they garnish my child support payments when i appear in court ? i don’t have any other form of income and i’m worried they might take legal actions and garnish my c.s payments .
Child support is typically protected from garnishment.
My parent are retired and living on SS only. State of Texas. They have very little they own (live in an RV that is paid for).
They have a car that they are leasing. They have credit card debt that if they pay monthly it leaves them not with not enough for food/necessities . I am thinking they should just stop paying the credit cards. They are in their 70’s and will never buy a home or major purchase at this point. So a good credit score is the least of their concern( which is not good at this point anyways). What do you suggest?
I would want my parents to consider that, and also look into filing chapter 7 bankruptcy. It is a more complete solution that will give them more piece of mind.
Hi, I live in FL and I had a lease I voluntarily surrender to Ford Motor Credit last year in May. I just recently found out they are suing me for the unpaid balance (a little over 6k) even though their lawyer never sent me a letter. I have been unemployed since August. What can they do? I have 3 cars under my name but only 1 is actually mine. Those 2 that aren’t mine are paid off, can they take them? What are my options since I pay all my debts on time and really don’t want to file for bankruptcy. I only have about 2k left from my severance. Hopefully I will find a job soon but I’m not working as of now.
Only one vehicle would typically be exempt, but judgment creditors do not want your cars. They want money. It is not common to have them coming poking around to confiscate a vehicle.
Michael,,
My x wife of 17 yrs ago Fraudulently is garnishing me monthly for support of our 22 year old but she also was paid 5 years back pay because she claimed I owed support. I paid every month and thru Probation so a record exists. She also received a portion of my SSDI we agreed that if and when I was approved she may have %10 until support ended. She lied to judge that I was approved and it took judge 37 months to reverse her order and told me to go get the overpayments in civil court. So she has been paid 37 months she lied to her. She was paid every dollar, plus received from my 5 years of back pay child support I already paid? She also lied and told SSDI before I got to file for my 2 dependants with my new wife that I only had 1 child and it was ours. So they paid the child who deserved only 1/3 of benefits and only for 32 months $50K and paid my 2 dependants living with me only $23K each who were entitled to the entire 60 months not just 32. I have reported this yet I am told only if my x wife and daughter return the overpayments can I then be paid what is $35K in support + 37 months she also was paid by lying that judge is forcing I take gher to court vs ordering her to repay it and the state has a record of my payments ? SO I PAID 3X child support and nobody helps. In all my 2 dependants are owed $38K , I am owed $35K from her getting 5 years of support I paid and is documented plus 37 months I paid her%10 of an SSDI CHECK I NEVER RECIEVED AND JUDGE TOOK 37 months to reverse. This judge has ordered my x wife’s motions be paid but every one of the 7 motions I had reversed by simply showing this judge OUR DIVORCE AGREEMENT. MY X IS NOW FILING FOR EVERYTHING ALREADY IN OUR AGREEMENT 2002, because JUDGE APPROVES IT AND TAKES YEARS BEFORE SHE ADmITS SHE WAS WRONG. OUR AGREEMENT ALSO STATES WE AGREE NEVER TO RETURN TO COURT UNLESS 2 x MEDIATIONS FAILS YET SHE IGNORED THIS AS WELL. THIS STARTED IN AUG 2014 when I became mentally disabled and this is absolutely delaying my recovery. I am a dentist and want to just go back to work. I am tortured every month with frivilous motions but judge approves anything my x files . This is just the Tip of the iceburg what has been done to me starting 12 years after we had no issues. She is taking advantage of my mental breakdown and a judge I asked be recused due to her law firm being next to my building with a large dental clinic. She (Judge) even said she HATED MY PATIENTS FOR PARKING IN HER LOT AND THEY WERE ANIMALS! SHE ALSO HAS REFUSED TO ALLOW ME ORAL ARGUMENTS AND HAS NEVER REQUIRED MY X WIFE PROOVE SHE SERVED ME WITH MOTIONS SO I COULD BE PREPARED TO JUST READ OUR AGREEMENT WHICH WOULD HAVE AND DID CAUSE JUDGE TO REVERSE all 7 motions.
You need a really good family law attorney. That is outside the realm of me experience unfortunately.
PLEASE HELP ME GET A LAWYER?
Hello Michael.
I had a judgement entered against me a couple of years ago by a credit union in the amount of $2800.00. I just remembered that I also had an IRA with them which exceeded the amount owed. It looks like they took it and never informed me and they are still dinging my credit on a monthly basis affecting my credit even more. Please advise what can I do to right this wrong.
Who is the credit union? How old is the judgment? Is the judgment appearing on your credit as paid/satisfied? With the credit unions reporting (not the public record judgment) are they showing a balance still owing, or zero?
I owe about $3,000 in past due ambulance bills. I am on disability and state takes my state refund towards these past due medical bills. Can they do this when I’m on disability and after paying for rent, car, prescriptions ect…… Many times I don’t have money left for groceries. What can I do? They also plan on taking my renters rebate.
Some states allow for the intercept of state tax refunds when there is a judgment against you, and in some other limited instances too. What state are you in?
Should I or will I have to give my social security number to a debt buyer trying to collect and has sent me a letter, who I am getting ready to call…if they dont already have it already ?, I want to prove Hardship? Am hoping statements ect will work for them. I am on social secirty disability.. if they dont have my social how are they able to find out other ways to collect on the $4,500.? Thank you.
A legitimate purchaser likely already has your social. They may ask to verify last 4 digits, and can usually use another form of ID like verifying your address and DOB.
Who is the debt buyer?
The letter is from a company hired to collect for the Current Creditor Midland Funding LLC (MID), according to letter. I have a vehicle in my name I need for MS doctor and Treatment Appointments, that I hope they wont take. The house loan (we live in Ohio) and my Husband’s older paid off car, are in his name, can they touch those? We have no other assets and no extra money since I am unable to work.
Midland Funding typically does their own collecting unless the account has been placed with a law firm to sue in order to collect.
If you are looking to establish a hardship Midland Funding is the only debt buyer that publishes a list of things that will cause them to leave you alone. Look over that link. The home ownership is the question mark I have, but if it does not show on your credit reports (only your husbands), than they will not likely see that.
I owe a little over 40k in credit card and unsecured loan debt live in Washington State my only income is my SSDI and my VA disability benefits also my wife receives SSDI we have a mortgage and a loan on a car we can afford these bills I was looking into maybe ch 13 but since my income can’t be touched should I just not pay any of these bills?
If you can put together a plan to resolve debts that is manageable with your current finances and goals, that is more ideal than stopping paying and letting the chips fall where they may.
You may not be able to have your income intercepted or affected, but you could be sued and a lien placed on your home. Chapter 13 could prevent that, and so could settling with those creditors for less than what you owe, but outside of the bankruptcy process.
Who are your credit cards with and what are the balances?
If I just cash my spousal support check can the creditor do anything? I live in Ohio
Probably not.
I am being sued by a credit card company. My only income is social security and spousal support. What can they do to me?
Your social security is protected, but I am not sure about your spousal support. You may have non exempt assets that are at risk too (like a lien place on your home).
My mother has a personal loan. She has become dementia and only has 600 S’s and sii coming in. I’ve taken her in and there’s no way to pay these bills. Help
There is nothing they can do to force the issue if she has no assets and only exempt income. I am not sure I would do anything given the circumstances.
Michael, I live in Kentucky and me and my wife are on SS, we are having a hard time paying our bills. I’m disabled and she was going to work until 65 but she got sick and had to retire early. I still owe on my house and my truck, I own a jeep that is paid for, some one told me that the bank that my truck is financed through will sell it for what they can get out of it and make me pay the rest, So my question is can they do that if I have to let my truck go back and can they take my SS. Thanks Michael.going hungry in Kentucky.
What you described is very common with auto loans that people cannot pay. Once they auction the car and apply the proceeds to what you still owed on the car loan, the amount left over is a deficiency balance. Those can be negotiated to lower pay offs of often 30-ish percent.
They cannot take your social security.
What if my income is only social security direct deposit in joint account with my husband and his is only social security and I may needfile bankruptcy but at my bank I owe on credit cards can my bank freeze my account or take the money in the account
To be safe, I would change where I bank, and even though I am going to file bankruptcy. Talk to your bankruptcy attorney and see if He/She advises the same, as many do.
Michael , I spoke with Ryan a while back and he mentioned something about deductions in Idaho for being judgement proof, I have not gotten a writ of execution yet , but for a single woman in Idaho is it 1/2 of what you told me previously?
75% of your wages are protected, with the ability to exempt more by contesting an garnishment as causing an undo hardship directly with the court. This does not apply to you on disability.
Up to $7,000.00 of your car value is protected.
Up to $100,000.00 of your home equity is protected.
$7,500.00 of your household goods are protected.
I am not sure if the above applies to me or half of that. I am now facing contempt charges because of a situation beyond my control ” the huge amount of snow we have up here right now”
The lawyer from legal aid said that I didnt have to pay my neighbor the legal fees, because of being judgement proof, however I have started paying him $50.00 month x 67 months , That is what it currently stands. Could he still put a lien on my property ? Im pretty sure I dont even have $50,000 equity in it ,however the lawyer from legal aid said that when property values go up he could foreclose on me. Does a judge have to sign off for the plaintiff to do this or could it just automatically occur when property values increase? I cant buy another home right now if he got a lien on the property and values suddenly spiked. he still hasnt cashed the check I sent on 1/23/17, I have already told the judge I am trying to pay him , Im very concerned about my situation , I have court again 2/6/17 and legal aid is all I have right now helping , I really appreciate any advice this service is a blessing! Thank you
Stick with legal aid. They are the closest to your situation.
I have never seen an involuntary foreclosure for a debt this size with a judgment. But I deal with banks and debt collection companies, not neighbor and property disputes. They would have to get the courts help to enforce that. It is not like you would wake up with an eviction notice on the door.
Thank you for trying to call me this week. I’m sorry I missed you. This is C. Tambi Gifford. Our situation is due to my husbands motorcycle accident last July, 2016. We have not paid any of our credit cards since I believe Aug. or Sept. 2016. /all the income has been from ss. We have not avoided the creditors. We have explained our situation. We simply cannot pay till he has recovered. We don’t have any money anymore. Unfortunetly we have relied too much on the cards thruout many years. We are learning one can actually live without them. Deciding what is necessary to buy and what can be done without them and streatching out our ss income. Up till the accident, we had paid the cards each month more than was asked for. Our credit was very good. Now its embaressing to admit being in card dept. of about $90,000. We are trying to calculate how much to pay when we are able to start bringing in extra money. There is nothing we can do till the healing happens. It seems like a deep hole impossible to get out of. But we have to try. By the way my husband is a Chiropractor, without the use of his left arm makes his work impossible right now. He is 66 and I’m 69. My work is seasonal as a landscape designer, so I will start up work soon with the weather starting to change. It all will take time. ( I am partially handicapped from severe arthritis) We live in the state of Oregon. Thank you for any help and advise you can give us.
It was nice to speak with you. Please continue to update this post with how things progress for you.
Hi, is C. Tambi . I have called Michael Bovee, left my phone number. My husband & I live in Stayton, Oregon. We are self employed. He is a chiropractor and I am a landscape designer. He is 66 & I am 69. Ben Gifford, my husband was in a Motorcycle accident last July, 2016. He has not been able to work since then. And I am seasonal. Our ss money is barely enough to handle house payments, utilities, vehicle payments and insurance. Our church came to our rescue for Nov. & Dec. 2016 house payments. We saved as much as we could for Jan. 2017’s house payment. Now we are stuck for the rest of our house payments. We are waiting for his recovery and the weather to warm up. The main fear is our credit cards have not been paid since the accident. We have been good at all our bill payments and never late. HAD a good credit score. Living without credit cards does teach you how to survive. But the creditors are scary. We don’t know what to do. We have not avoided the credit0rs, and have told them our situation. But they don’t listen. We have no money for them! Our world is turned upside down. What do we do? We are good citizens and not trying to get out of our obligations. There are a lot of sad days. Thank God he did not die, but was pretty messed up. The surgery is going to take a while for him to recover. Thank you for listening.
Credit card banks typically subject their unpaid accounts to their collection policies regardless of the hardship or inability to pay. You can mange the calls a bit using the tips in this article: https://consumerrecoverynetwork.com/handle-collection-calls-from-debt-collectors/
I would encourage you to read this overview about your debt relief options.
I should have all of Mondays messages returned today.
i am 67 yrs. old on ss only….854.00 a mo. i have no assets……i still make payments on my car……i stopped making payments on 3 credit cards….just received a summons of complaint dealing with discover debt of 1800.00….they are asking for me to send letter to a lawyers office as well as the court…i’m confused…what do i send to this lawyer and court….i have been sending judgement proof letters with a copy of my ss income to all three companies….at this point discover is the only one pursuing this issue……i will show up when a court date is set…..what should i say… i no i cannot pay. i live in ohio……
What they want you to send may be your answer to the lawsuit.
Look for a low income legal aid office in your area, or in a nearby Citi, and see how they may be able to help you. At the end of this may be a Discover judgment, but it sounds like one they will not be able collect on.
My mother receives SSI benefits she owes a few cc companies debts can they garnish her bank acct she doesn’t have any assets except the home she lives in and is paying a mortgage on in FL ?
If exempt benefits like social security are all she has in her bank account that money is protected.
My youngest son is getting these debits pay this settlement, etc. He never had Bank 1 or another bank credit card. BUT I did. they went bad and I couldn’t pay them.
2009 my job went to India and I couldn’t pay them off. I still get phone calls from collection agencies. I am 65 yrs old now only on SS.
Can they go after my children for my bad debits. LIKE it seems they are doing with my youngest son who had NOTHING to do with it.
No, they cannot go after your children to collect like this. Check out this article about debt collection scams. That may be what you are dealing with.
I was just named POA for my brother, who is 56 yrs old and has been receiving SS ($803/mo) for being disabled. He has just had his leg amputated and is in a rehab facility. WE are speaking with him in the hopes of moving to an Assisted Living facility. We understand the AL facility would get his entire SS check, with the exception of $50. He is 5-6 months delinquent in his mortgage and I see statement indicating credit card debt, as well as utilities debt. Some utilities appear to have been shut off while he was still living there. Should He owes approximately $40k on the house. Should I pay the minimum amount on his credit cards or let them ride? He received his monthly check for January and it is sitting in his bank account. Should I w/d it so creditors or the mtg lender can’t take it? Thanks..
If there is no equity in the home I would let it go.
If he is what we often call judgment proof (no collector could force payment of any kind even with a judgment), I would similarly tell my brother to stop paying on the credit cards.
The quickest path to resolving all of this, and him not being hassled in the future, is to file chapter 7 bankruptcy. That can often be done for less than $1,600, and would provide complete relief from anything regarding the home and the credit cards.
I was told once judgement was made or placed that there was nothing we can do to pay creditors. We are in a extreme financial hardship and i am off and temporary disabled /lost my income which was our second income and my husband is the only one that gets paid now… We started paying a creditor that threatened to garnish wages and now falling even more behind on our bills … What options do we have as medically disabled individual and a family in hardship. Thank you for your input
What do you owe, and how much? When did you last pay on those accounts?
Under whose name are each of the credit cards, and what state are you in?
Hello Micheal
It was anount of $3000 and ended up being $5000 after legal fees – the card was Discover Card and its under my husbands name – we started making about 2 months now and last month was the most recent payment….. From what it looks like they were going to try to garnish wages …. Its not under fiscover card anymore its under a law group … Windering if there is something different we can do with our current situation finacial hardship?
Ty Micheal for your replies… Would appreaciate any suggestions or ideas on what to do… Still dealing with workers comp case that has affected our finances tremendously- im still off and medically disabled with my husband being the only one working at this time
We are in california
It sounds like he was sued and a judgment entered in the court. If that is the case, they can garnish in California, place a bank levy, or lien property. If you are able to get them to agree to accept an affordable monthly amount, and stick to it, you can prevent any of that.
If you became unable to make the payments you set up, and were garnished, you could object to that formally with the court in order to show how you meet full or partial exemptions in California. If you do not meet them, Discover does get to garnish regardless of the hardship your family is in.
Let me know if this is not a judgment yet.
no judgement – but that is exactly what has been happening – we worked out a payment but from what they told us its the lowest they can go. I was trying to stay under 100.00 – payment is at 150.00
thank you for your input.
They were working on a judgement for garnish