Can a Debt Collector Come After My Social Security?

Several of the commenters here at Credit.com have recently touched on whether Social Security benefits are safe from debt collectors. And it turns out that the answer isn’t necessarily clear-cut.

First, it would depend on what kind of Social Security you’re talking about — SSI, SSDI or Social Security retirement benefits. And, it depends on what sort of debt you owe.

Supplemental Security Income, or SSI, is a kind of a general welfare program. Funds come from general tax revenues (not the Social Security taxes that are taken out of your paycheck), and the payments go to people who are disabled, blind or elderly and lack the financial resources to care for themselves. SSDI, or Social Security Disability Insurance, is funded out of Social Security taxes. To be eligible, you have to have worked and become too disabled to work. In that case, you would have paid into the system from which you are receiving benefits. While both kinds of Social Security go to people who are disabled, they are treated differently when you have outstanding debts.

SSI cannot be garnished by anyone, including the IRS, says Jonathan Ginsberg, a lawyer specializing in Social Security disability issues. The same is not true of SSDI, although there is partial protection. “Judgment creditors cannot touch SSDI, but the government can garnish SSDI for child support, past-due taxes, federal student loans and overpayments by governmental agencies,” he wrote in an email. He said Social Security retirement benefits work the same way. (A special note to grandparents who co-sign student loans: You may be putting your retirement benefits at risk.)

Ginsberg said it’s smart to avoid co-mingling funds from different sources in a single account; he advises a segregated account for Social Security benefits. “It is easier to prevent an improper/illegal seizure than to get the money back,” he noted.

So, while you cannot safely assume that your Social Security income is safe from all creditors, it is safe from many. And it’s a good idea to make sure your banking practices allow you to track the sources of your income. If you should need that information, you’ll be glad you did.

Finally, if you know that you have outstanding debts, and you’re concerned about your credit, it’s a good idea to check up on your status. You can do that by checking your credit reports — which you can get for free once a year — and by monitoring you credit scores regularly — which you can do for free through Credit.com. While you may be reluctant to see what you owe, it’s still very important to make sure what’s being reported is accurate, and to have a good idea of your overall standing so you can come up with a plan to move forward.