economy
What happens to your Social Security if a creditor wins a lawsuit against you?
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TL;DR
- Social Security benefits are largely protected from private creditors by federal law.
- Private creditors cannot garnish wages or levy bank accounts for Social Security benefits.
- Federal government creditors, like the IRS or for federal student loans, can withhold Social Security benefits.
- Banks must automatically protect two months of direct-deposited Social Security benefits from levies.
- Funds exceeding the two-month lookback period in a bank account may lose protected status.
- It is important to notify your bank in writing if funds are improperly levied.
- Consumers can proactively assert Social Security exemptions in court before judgments are entered.