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Lane
Lane, JD,CFP, MBA, CRPS
Category: Social Security
Satisfied Customers: 12700
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial, Social Security & Tax advice since 1986
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If you are on disability and someone threatens to file a

Customer Question

If you are on disability and someone threatens to file a law.siite against you. Can they do that? Or is social security disability protected.
Submitted: 1 year ago.
Category: Social Security
Expert:  Lane replied 1 year ago.

Hi,

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Socail Security (and VA) is protected from ALL private creditors.

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When a collector sues you for the debt and wins a judgment, it can ask your bank or credit union to turn over money from your account. This is called a levy. Banks must automatically protect Social Security and VA benefits from levies if they are direct deposited into your account.

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If the creditor trist to GARNISH Social security (where they ask Social Security to send them a portion of the payment (as they do sometimes with employers) the request will just be ignored.

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But the direct deposit protection is not UNLIMITED protection.

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If a collector tries to levy money in your account, your bank must look at your account history to see if you received any Social Security or VA benefits by direct deposit in the last 2 months. The bank must protect 2 months’ worth of benefits from levy and let you use that money.

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If your account has more than 2 months’ worth of benefits, your bank can freeze the extra money.

Expert:  Lane replied 1 year ago.

Also, many people receive Social Security or VA benefits on a prepaid card. If your benefits are loaded onto a Direct Express card or to another prepaid account, they are still automatically protected from levy just like money in a bank account.

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There ARE exceptions, however.

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Social Security and Social Security Disability Insurance (SSDI) can be garnished to pay government debts such as back taxes or federal student loans, and debts for child or spousal support

Expert:  Lane replied 1 year ago.

Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit")

JustAnswer will not credit me for the work unless you do.

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Thank you!

Lane

I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.