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Garnish my disability check?

Dear Dr. Don,
I filed for bankruptcy in 1998 because I bought too much on credit.

Since then, I have managed to keep my spending under fairly good control. I have rebuilt my credit to where I have two credit cards, with a very low limit on each one. I have become 100-percent disabled due to health reasons, and my disability check gives me just about enough money to get by.

Now the problem is that every hospital in the area is trying to sue me for money I don't have. They are talking about garnishing my disability check. I do not mind paying my debts if I have the money, but I cannot afford to spend more than I do now and still be able to live. Can a hospital garnish my government disability check? I live in Virginia if that makes any difference in answering my question. Thanks.
-- James Jam

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Dear James,
Federal and state laws provide exemptions protecting some income sources from garnishment. Laws vary by state. The Code of Virginia addresses these exemptions in § 8.01-512.4 -- Notice of exemptions from garnishment. Federal code addresses garnishment in Title 15, Chapter 41, Subchapter II, Section 1673 -- Restriction on garnishment.

Before a creditor can garnish your income, they have to sue and win a court judgment against you. Virginia law requires that a notice of exemptions form and a claim for exemption form be attached to any summons in garnishment. You can use the claim for exemption form in a request for a hearing concerning a garnishment exemption claim.

Creditors typically can't garnish welfare, Social Security, unemployment, pension or disability checks. There are exceptions. For example, you're not likely to exempt income from garnishment when it concerns back child-support payments.

You may be "judgment proof" if your creditors can't attach income or assets for payment. Read Alternatives to Chapter 7 Bankruptcy on Nolo.com for help in determining your exposure to judgments.

If you're not "judgment proof" and you received a Chapter 7 bankruptcy discharge in 1998, then you have to wait six years before you can again file for bankruptcy under Chapter 7. You should still be able to file for bankruptcy under Chapter 13. Consult a bankruptcy attorney to determine if this is the right course of action for you.

Bankrate.com's corrections policy-- Posted: April 3, 2002
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