Will you lose your Social Security income due to ailing health and debt?

Have you been unable to make consistent payments on your debts due to ailing health? Are you afraid that your creditors will garnish your Social Security checks after making several unsuccessful attempts to collect debts? Well, your fears are not totally unjustified. If your health is not in a good condition and you’re on the verge of retirement, then it can be easily said that you’ll heavily bank on the Social Security income for meeting the living costs. If the creditors put their hands on this money, then you’ll be in a serious trouble.

Will the creditors try to garnish your wage?

It actually depends upon the debt load you’re carrying on your shoulder. If your debt load is really very heavy, then the creditors will pursue you for payments. They may assign your accounts to aggressive debt collectors to retrieve the money.

The debt collectors can be quite nasty. They can simply try to garnish your wage and take away your assets. However, they would need to seek permission from the court before taking this action. They can’t do whatever they feel like. They’re bound by the federal law.

If you really owe a very small amount to the creditors, then they may just sell the accounts to the collection agencies. The accounts can be resold to other debt collection agencies as well. This would be really painful for you as the collection calls would never cease to exist. You’ll get calls from one collection agency in one month. You may get a new call from another collection agency in the next month. Your sufferings will never come to an end.

If you really want to avoid that situation, then try to communicate with your creditors as early as possible. Try to work out a repayment plan with your creditors.

lost social security to debt

Lost Social Security to Debt

As far as the Social Security benefits are concerned, the Treasury Department has issued some strict instructions regarding them to the banks. The banks are instructed to not send any money to anyone from your Social Security income.

If the bank (where you’ve your checking account) gets a garnishment notice, then its first job will be to safeguard the federal benefits credited to your account in the last 60 days. This means if you receive $3000 every month from Social Security income, then at-least $6000 will be safe in your account. The bank can’t give this amount to anyone.

Previously, the scenario was entirely different. Banks had the power to freeze your checking account until you proved that a portion of the funds came from the Social Security. Thankfully, the scenario has changed now and you can breathe a sigh of relief.

What should you do to avoid garnishment?

Your best option will be to facilitate a repayment plan. However, if you’re unable to do this, then talk about the probable solutions with a credit counselor. If the credit counselor is also unable to help you out, then consult a bankruptcy attorney who can tell you the legal tricks to avoid the wage garnishment hassles.

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