Most creditors are prohibited from garnishing you social security income in any way thanks to Section 207 of the Social Security Act. However, the federal government may garnish wages from SSI if you owe a federal debt. Examples include tax payments, food stamp overpayments and government backed mortgages. If you default on a home loan backed by the Department of Veterans Affairs, the government can garnish your SSI.
VA Loan Default Basics
When you default on a VA loan, you actually default with a private lender first. Once the VA has assumed your mortgage, which it may do if you have a guarantee on the loan, will you owe the money directly to the VA. At that point, the VA will issue a notice of outstanding debt to you. If the VA intends to garnish your wages in any way, you will receive a notice from the VA stating this.
VA Loan Wage Garnishment Guidelines
If your SSI is greater than $750 per month, the VA can garnish the wage. If you earn less than this threshold, your earnings are protected. This amount can change by year based on laws and regulations. Similarly, at the time of publication, the most the VA can garnish is 15 percent, but this can change by year.
Reducing Wage Garnishment
You may feel like a 15 percent reduction in your SSI would prevent you from meeting your financial obligations. In this case, you may file for protection with the court. Filing for bankruptcy is one option. While federal debts are rarely excused in bankruptcy, you may be able to reduce the amount of the garnishment in accordance with your income and financial responsibilities. If you intend on fighting wage garnishment, you should file with the court as soon as you receive notice the VA intends to garnish your SSI.
Wage Garnishment of Other Income
Aside from garnishing your SSI, the VA can garnish other income you are receiving. Typically, much of your income would be protected from garnishment, including unearned retirement income or unemployment income. These income sources are not protected in the face of wage garnishment by the government. Federal law limits wage garnishment to either 25 percent of your disposable income per week or no more than 30 times the federal hourly limit, whichever is lower.
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