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Social Security And Dealing With Debt

Whether you’re entering your golden years or dealing with a significant disability, Social Security can be an important lifeline at a time when you aren’t able to work as well as you used to. If you’re dealing with significant debts, it’s especially important to have some form of income which you can rely on without having to watch it disappear before you can do anything about it. However, while Social Security benefits are ordinarily protected from debt collectors, there are some exceptions which you should keep in mind.

A Heavy Weight

Oftentimes when you’re dealing with a heavy debt burden or outright bankruptcy, debt collectors can have the courts order your wages garnished to cover part or all of your debt payments. If you’re fortunate enough to not know what wage garnishing means, what happens is that some of your weekly or biweekly income is removed from your paycheck before it so much as reaches your bank account (although it’s still counted against your taxes, naturally).

Ideally, you should never have so much debt and so little income that you have to face off against debt collectors in court, but the world isn’t an ideal place. Some people may face a significant debt load because of questionable decisions, but oftentimes we wind up in these situations thanks to circumstances out of our control.

A person may buy a house one day, confident in his or her ability to pay the mortgage thanks to a steady job, but ten years later he or she may wind up downsized at a time when no one is offering work in the same profession for anywhere near the same salary. The house may also be ruined by a flood or a house fire which isn’t covered by the homeowner’s insurance, ruining his or her investment while forcing him or her to pay the rest of the debt and also footing another bill to cover a new place to live. Other classic ways into debt include massive hospital bills and enormous student loans.

Whatever your circumstances may be, if you’re unable to reconcile your payments with your debt collectors, you may face wage garnishment. Having someone else automate your debt payments may take a load off your mind, but it’s nevertheless true that you still need money to put food on your plate and keep a roof over your head. If you can’t manage to do either one with your wages garnished, then you may find your debt situation or your living conditions grow worse by the month.

Government Paycheck, Government Collectors

Fortunately, whether you receive a Social Security payment thanks to disability or retirement benefits, your money is safe from most debt collectors and even from bankruptcy courts. However, there are certain notable exceptions.

If you owe the federal government money, whether through a federally-backed mortgage, federal student loans, or back income taxes, government agencies have the ability to garnish your Social Security income down to $750 a month. If your debt happens to be your income tax, they can take even more than that.

An ex-spouse may also be entitled to take a portion of your Social Security check, although the laws regarding this vary from state to state. In Florida, for instance, a former spouse is allowed to collect half your Social Security benefits if you’re both over 62, if you were married for over 10 years, if he or she hasn’t remarried in the meantime, and if his or her Social Security payments would otherwise be lower.

Like any extension of government bureaucracy, Social Security can at times be a confusing mess of legalese and red tape. At All Injuries Law Firm, we are happy to offer legal advice and consultations to the residents of southwest Florida who need help understanding the ins and outs of this massive federal program. Remember, you earned your benefits thanks to years of hard work and sacrifice, so you should make sure you’re getting as much of it as you deserve.