Creditors have a variety of means of getting paid what they are owed by debtors. A creditor is allowed to sue a debtor in civil court -- as long as the statute of limitations in the state for debt has not expired -- and, if the creditor wins, he will often be allowed to seek a garnishment order for the debtor's wages. However, certain kinds of income are off limits to private debt collectors -- a debt collector that is not party of the government -- including Supplemental Security Income.
Garnishment
A creditor is only allowed to garnish wages if he has first received a court order from a judge who has rendered a decision in a civil judgment filed by the creditor. In some states, garnishment for private debts is not allowed. In addition, federal law, as well as some state laws, protect low-income individuals from garnishment. In addition, only some types of income can be garnished.
SSI
Supplemental Security Income, also called SSI, is a form of Social Security benefit provided to low-income people with disabilities. When a person first receives benefits, he will often receive benefits that are retroactive to the day he filed his application. This is known as SSI back pay. A private debt collector will not be able to receive an order of garnishment for SSI income because a judge is not allowed to authorize it, nor would the Social Security Administration honor it.
Government Debts
Only the government can garnish SSI. The government will only garnish a person's money if he owes money to it. Therefore, if a person defaults on his student loan payments or owed back taxes, the government could garnish his SSI. However, the person would receive many chances to pay the money back before having his income garnished. Only after the person refused to bring his payments up to date would the government proceed with garnishment.
Considerations
Not only is SSI income protected from garnishment orders, but a creditor cannot seize the money when it has been deposited in a bank account. Federal law protects most forms of government benefits, including SSI, from seizure by creditors even after it has been disbursed to the individuals. If a creditor wrongfully seizes SSI funds from the debtor's bank account, they must be returned to the debtor.
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