Federal Benefits Exempt From Garnishment
We’re not going to lie to you; there are several things at risk if a debt collector sues you. If the suit is held up in court, private entities may be forced to turn over your funds to help offset a debt. This includes banks and employers.
But there are a few things that are safe from garnishment. Some federal benefits are untouchable, and you may benefit from knowing which ones.
According to federal statute, the following federal benefits are exempt from garnishment:
- Social Security Benefits
- Supplemental Security Income (SSI) Benefits
- Veterans’ Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Service Members’ Pay
- Military Annuities and Survivors’ Benefits
- Student Assistance
- Railroad Retirement Benefits
- Merchant Seamen Wages
- Longshoremen’s and Harbor Workers’ Death and Disability Benefits
- Foreign Service Retirement and Disability Benefits
- Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
- Federal Emergency Management Agency Federal Disaster Assistance
Are there any exceptions?
There are. While in most cases these benefits are beyond the scope of the debt collector, some circumstances may be cause for an exception. If you owe alimony, child support, taxes or student loans, your benefits could subsequently be up for grabs. Knowledge is power, so it’s best to go into the situation knowing your rights.
If a debt collector sues you, it is extremely important that you respond to the suit. We’re all tempted to let things blow over, but inattention in this case can be disastrous. As unpleasant as the process may be, it’s far worse when coupled with late fees and other costs associated with procrastination.
Our advice? Respond to your collectors as soon as possible, and contact an attorney for sound legal advice on how to proceed. Bankruptcy law, with all its exemptions, can be a daunting subject. Leave it to the experts, and we’ll make sure you’re covered.