If a person owes money to another party, the creditor will sometimes bring a lawsuit against the debtor for payment. A creditor that wins such a suit will have several new options as for collecting the money owed. While wage garnishment may be available to him, he cannot likely garnish Social Security benefits.
Garnishment
Federal and state laws restrict the practice of garnishment in Wisconsin. A creditor can only garnish the wages of people who are above the federal poverty level. In addition, only certain types of income can be garnished. In general, private creditors can only garnish a person's wages, not benefits provided by the federal government, such as Social Security benefits.
Social Security Benefits
Social Security benefits, including retirement, disability and Supplemental Security Income, are protected by federal law from garnishment from creditors. A creditor is not allowed to serve a garnishment order on a federal agency unless he himself is working as a representative of a federal agency. This would not actually happen, as a civil judge would never grant a creditor permission to garnish a person's Social Security benefits in the first place.
Private Creditors
A private creditor is not just barred from garnishing a person's Social Security benefits, but he also cannot seize money from a person's bank account if the money derives from federal benefits. If the person who the creditor is seeking money from has few assets and is only supported by federal benefits, then the creditor may not be able to recover the money without finding another source of income of the debtor.
Federal Government
While private creditors are barred from garnishing the wages of a debtor, the same does not hold true of federal government agencies. Many government agencies, such as the Internal Revenue Service, can garnish federal benefits, including Social Security benefits. However, many of the same low-income exemptions apply to federal agencies. Therefore, if a person is living solely off of federal benefits, garnishment by the government may be impossible.
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