New Garnishment Rules Aim To Protect Social Security Benefits

What is Wage Garnishment?

Wage garnishment is a legal remedy that allows a creditor to take money directly from a bank account or you paycheck. If the creditor sues you to collect a debt and wins a court judgment against you, the creditor can ask the court for an order to garnish your salary, bank account, or other assets.

A creditor can obtain a court order requiring your employer to withhold some of your salary and pay it to the creditor. In addition, a creditor can ask the court for an order instructing your bank to turn over funds you have in your bank account.

Social Security Benefits Protection

Social Security benefits have been exempt, in most cases, from garnishment. The problem has been that banks would freeze accounts when they received a garnishment order and not check to see if Social Security checks had been deposited.

The U.S. Treasury Department has issued a new rule that forces banks to check whether Social Security or other federal benefit payments have been automatically deposited into the account. If so, the bank must protect two months’ worth of those payments. This is to protect the elderly, who may have very limited financial resources and may not understand the process to challenge a garnishment of their social security benefits.

Questions? Speak with an Attorney

Because garnishment is a statutory remedy (created by the legislature) it is very technical, with formal requirements to create a garnishment and to challenge one. If you have questions about protecting your social security payments or any wage garnishment, speak with an attorney experienced with consumer protections and collections law.