Liens against Social Security benefits are typically referred to as garnishments or levies. Social Security payments are subject to liens in certain circumstances. Federal laws protect your Social Security income and benefits from garnishment by debt collectors with a civil judgment lien. Debt collectors must follow specific rules as established by the Fair Debt Collection Practices Act (FDCPA). If a debt collector threatens to put a lien on your Social Security, he has violated the FDCPA.
What is a Debt Collector?
According to the FDCPA, a debt collector is any person or business operating with the principal purpose of collecting debts. The FDCPA further stipulates that debt collectors are not employees of original creditors or employees of the United States. Debt buyers are considered debt collectors and subject to the laws of the FDCPA. In order for a debt collector to collect the debt using a lien, it must first obtain a civil judgment. Debt collectors with civil judgments can place a levy on your bank account.
Bank Account Levy
Banks must comply with a court-ordered bank account levy, or garnishment order, by freezing the amount of money within an account that is equal to or less than the amount listed in the court order. Some states allow banks to deplete an account, while others protect a minimum amount of funds, such as $100. Banks do not have the responsibility to determine the source of the funds, so if your Social Security income is in the account, you must act to protect it.
States have specific procedures for protecting the Social Security and other exempt funds from debt collector liens. Typically, the money is frozen within the account for a certain time period—10 to 15 days—in order for the account holder to file an appeal with the courts. Debtors must prove to the court that the funds within the account are from Social Security or some other exempt source, such as child support payments or unemployment compensation, in order for the levy to be lifted.
Social Security Non-Exemptions
Debt collectors cannot legally keep Social Security income and benefits, but your Social Security income is open to garnishment from federal tax liens, liens resulting from unpaid federal student loans and child support court orders. Even though these liens are a result of a debt that you owe, the liens are not a result of debt collectors as defined by the FDCPA.
- FTC: Fair Debt Collections Practices Act
- SSA: SSR 79-4: Levy and Garnishment of Benefits
- Financial Web: Creditor Judgments and Exemptions
- Consumer Financial Protection Bureau. "Are There Laws That Limit What Debt Collectors Can Say or Do?" Accessed June 30, 2020.
- Federal Trade Commission. "Debt Collection FAQs." Accessed June 30, 2020.
Katherine Kally is a freelance writer specializing in eco-friendly home-improvement projects, practical craft ideas and cost-effective decorating solutions. Kally's work has been featured on sites across the Web. She holds a Bachelor of Science in psychology from the University of South Carolina and is a member of the Society of Professional Journalists.