Although there are some exceptions, a creditor, or a person or company to whom you owe money, generally cannot garnish your disability income for the purposes of repaying credit debt, whether your income is in the form of government or private disability insurance payments. However, there may be some circumstances, and some jurisdictions, in which garnishment of your disability benefits might occur.
For the purposes of being exempt from garnishment for credit debt, disability income can take several forms. Federal disability benefits paid by the U.S. Social Security Administration, such as Social Security Disability Insurance and Supplemental Security Income, are generally exempt from garnishment for credit debt. Many state-sponsored disability programs also are exempt, depending on that particular state’s law, of course. You also might be receiving disability insurance payments through a private insurance policy, such as a program offered through your employer.
Typically, most types of debts that you owe, including credit debt, are exempt from garnishment. This means that your credit debt, even if you have been late in making your payments, or if you have failed to make your payments altogether, cannot be garnished. If you have no other assets besides your disability income, then your credit debt basically becomes uncollectable, unless your situation changes and you obtain some other type of income or asset that might be subject to garnishment.
Nevertheless, if you have certain types of debts, your disability income may not be exempt from garnishment. For example, current and back child support that you owe usually can be garnished from your disability income. Likewise, your disability income may be subject to garnishment if you owe federal tax debts, or debts owed to another federal government agency. In some states, alimony is a debt that can result in the garnishment of your disability income. Despite these exceptions to the garnishment of disability benefits, however, Supplemental Security Income (SSI) still cannot be garnished, even for debts such as child support and federal tax debts.
If you receive disability income, and believe that you are at risk of having your disability income garnished for credit debt or other types of consumer debt, you should immediately contact an attorney for assistance. An experienced attorney can advise you of your rights to protect your disability income from garnishment for credit debt.