- advertisement -
Columns: Dr. Don
Don Taylor, Ph.D., CFA, CFP   Expert: Don Taylor, Ph.D., CFA, CFP
Ask Dr. Don
Woman must get finances on track
Ask Dr. Don

Law protects SSI disability benefit

Dear Dr. Don,
Can credit card companies garnish my disability check if I stop paying my bills? I have gotten in way over my head and can't make my credit card payments due to illness and the cost of my medical bills and medicine. I have been paying only the amount due but have fallen way behind and now owe late fees and over-the-limit fees.

- advertisement -

I can't get a break to catch up, so I have stopped paying and am worried they will try to take my disability check. Thank you for any advice you can give me.
-- Rose Refrain

Dear Rose,
Yours is a common question concerning supplemental security income disability payments. The Social Security Administration's Web site has information about garnishment on a frequently asked questions page.

According to the Web site, Social Security benefits are protected from assignment, levy or garnishment in all but five cases.

5 exceptions to Social Security protection:

However, the Web site also goes on to note that supplemental security income, or SSI, payments "cannot be levied or garnished."

A key to avoiding garnishment is to not commingle your benefits with other monies in the account. Maintain a separate account for benefit payments.

You need to look beyond your fear of garnishment to how you are going to get your finances back on track. Talking with a credit counselor about your debt is a good first step. By doing so, you may be able to end the late fees, and over-the-limit fees you're racking up in these accounts.

The FTC Facts for Consumers publication, "Fiscal Fitness: Choosing a Credit Counselor," is required reading before you start interviewing credit counselors.

Bankruptcy may be your best solution. Part of the new bankruptcy law is a requirement to get credit counseling, so that step won't be wasted. The FTC has some required reading there as well with its publication, "Before You File for Personal Bankruptcy: Information About Credit Counseling and Debtor Education."

Bankrate.com's corrections policy -- Posted: April 17, 2008
More Q&A stories from Dr. Don
Ask a question

Can creditor garnish disability income?
Disability benefits are not taxable income
Disability income threshold
Video: 5 myths about going green
5 myths about going green
Video: Ways to keep produce fresh

Compare Rates
30 yr fixed mtg 4.45%
48 month new car loan 3.77%
1 yr CD 0.89%
Rates may include points
  How much life insurance do I need?  
  Calculate your payment on any loan  
  What will it take to save for a goal?  
Begin with personal finance fundamentals:
Auto Loans
Credit Cards
Debt Consolidation
Home Equity
Student Loans
Rev up your portfolio
with these tips and tricks.
- advertisement -
- advertisement -