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Can My Retirement & Social Security Be Garnished?

Author: Ethan Williams

Can your Social Security and retirement pay be garnished? In a word: No – but in two words: Well, maybe. And in a phrase: Depends on who's doing the garnishing.

First, They See You In Court ...

Here's how garnishing works: A creditor – let's call him Mr. Potter – hauls you to, say, the Bedford Falls Courthouse and wins a judgment against you. Let's call you George. Then said creditor asks the judge for an order to garnish your wages, bank account, and any other assets you may have, such as that dusty painting in the hideous old frame – that one by Monet or Manet or whatever his name was – even though the thing's been in the Bailey family forever.

Where You Can Win Some ...

What Pottercorp (aka They) can't take: Federal benefit payments. We're talking Social Security, Veteran's benefits, Railroad Retirement, and Office of Personnel Management retirement. Especially if They (aka Pottercorp) has issued you a credit card or auto loan and your payment is late. Medical bills are included, along with personal and payday loans. That's according to Section 207 of the Social Security Act. It's the law. Better luck next time, Mr. Potter.

And You Can Lose Some.

Not so fast, George Bailey! If you're still working, that mean old Mr. Potter – er, your legitimate creditor – can garnish your wages and, depending on the state you live in, other allowable assets that you have, like the house, or the car, or even that moldy old Monet. Welcome to It's-A-Not-So-Wonderful-Life renting a shack in Pottersville. (You may be interested in How To Confront A Debt Collector and Outfox The Debt Collectors Hounds.)

But Here Come The Feds ...

However, say you owe the Federal Government back taxes. Well, the Treasury Department is colder and nastier than Mr. Potter. You're going to fork over 15% of your SS. Alimony? Child support? You're going to have to fork over as much as 50 to 65% if you ever want to see Zuzu's petals again.

Hearts Colder Than "Frozen."

Okay, about that Maybe. Once your bank, the Bailey Building and Loan, receives the garnishment order, it has two business days to conduct a review and identify your accounts, and if the order is to collect federal taxes or child support, the Building and Loan may freeze those accounts, even if the money is from Social Security.

There's A Look-Back Period.

If you're not ordered to pay back taxes or child support, then the bank has to review the history of your account (or accounts) for two months prior to receiving the garnishment order. If your SS or other protected benefits have been directly deposited into your accounts within that two months (the so-called look-back period), the bank must protect the funds up to the total of the direct deposits.You're free to spend it on anything, including a flaming rum punch for Clarence the Angel.

Overdue-Student-Loan Blues:

George Bailey didn't go to college and didn't need to take out a federal student loan, but if he had and then became delinquent, the Government would have to keep its sticky fingers off the first $750 of his monthly benefits. Above that amount, it can take 15%, or anything above $750 up to an amount equal to 15%. gives a good example: If you get $800 in benefits, 15% is $120. But since you can't be given less than $750, the most that can be taken is $50. This rule applies only to federal student loans, not private loans.

The Bottom Line

If it doesn't seem that it's going to end happily like the movie "It's A Wonderful Life," get legal help. Go to, where the American Bar Association provides links to free and low-cost legal help. And there's also the Eldercare Locator at 800-677-1116 for referrals.

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