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The Consumer Law Group, P.C.

Which federal benefits are exempt from wage garnishment by debt collectors?

What Wages Can Be Garnished?If you are contacted by a creditor or debt-collector, it is very important that you notify the creditor, in writing, that you dispute the debt and request proof of the account. If the creditor decides to file a lawsuit against you, and you fail to appear to the first court date, a default judgment will get ordered against you and the creditor may start garnishment action.

What Can Be Garnished?

If a creditor or debt collector successfully sues you to collect the money you owe, the court will issue a judgement against you. The judgement will state the amount of money you owe and allows the creditor to get a garnishment order against you, directing a third party to turn over funds to pay the debt. The garnishment order may apply to the following:

  • Your employer. If the creditor or debt collector orders garnishment of your wages, your employer will withhold part of your compensation and give it to the debt collector.

  • Your bank. A garnishment order may also apply to any money you have in a savings or checking account. The bank will be directed to turn over funds from your account to the creditor.

Benefits That Cannot Be Garnished

In most cases, federal benefits cannot be garnished to pay debts on credit cards, car loans, mortgages, and medical bills. The following benefits are exempt from garnishment:

  • Social Security Benefits

  • Supplemental Security Income (SSI) Benefits

  • Veterans’ Benefits

  • Civil Service and Federal Retirement and Disability Benefits

  • Military Annuities and Survivors’ Benefits

  • Federal Emergency Management Agency Federal Disaster Assistance

If you depend on any of these benefits, you can rest assured that they will not be redirected to pay off debt. However, federal benefits can be garnished in some cases to pay delinquent taxes, child support, alimony, and student loans.

The Consumer Law Group Can Help

If you are the victim of unfair debt collection practices, you can take legal action. Tell us your story through the contact link on this page and we will get back to you. We are dedicated to protecting consumers’ rights.