Can VA Benefits Be Garnished?

When a person owes a significant amount of money on an unpaid debt, the creditor may try to forcibly collect payment on the money owed. In this case, the individual may be the subject of a garnishment -- a forcible seizure of the person's wages or other income. While most forms of income can be subject to garnishment by private creditors, federal benefits, such as VA benefits, cannot be.

Garnishment

In order to garnish a debtor's wages, the creditor must first win a lawsuit in which he is awarded damages. A creditor will usually file a suit alleging breach of contract, as the debtor failed to abide by the terms of the loan contract. If the creditor wins, the judge may allow him to serve a garnishment order on the debtor's employer, or other provider of income, and siphon off the owed money.

VA Benefits

There are a number of different sources of income that cannot be garnished by private creditors. This includes most types of federal benefits, including those benefits provided by the Veterans Affairs Administration. These VA benefits are exempt from garnishment by private creditors. This means that they cannot only not be garnished, but they cannot be seized after the recipient has placed them in his bank account.

Exceptions

While private creditors cannot garnish federal benefits, certain governments can. While a government agency will not attempt to collect on a debt owed to a private creditor, it may attempt to collect on money owed to the state. If the debtor owes back taxes or child support payments, or if he has defaulted on his student loans, he may find his VA benefits garnished.

Means Test

There are some cases in which the government will not be able to garnish VA benefits, even if the debtor owes money to the government. For example, many states have means tests, which restrict the garnishment of income from low-income individuals. If the individual makes little money or has dependents he is actively supporting, then he may be ineligible to have his wages garnished, even by a government agency.