Start My Answer

Can Private Disability Payments Be Garnished?

Chloe Meltzer | February 28, 2024

Chloe-Meltzer
Legal Expert
Chloe Meltzer, MA

Chloe Meltzer is an experienced content writer specializing in legal content creation. She holds a degree in English Literature from Arizona State University, complemented by a Master’s in Marketing from California Polytechnic State University-San Luis Obispo.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Debt collectors have many ways to collect what you owe. But can they take your private disability payments? Find out what income and assets are protected here.

Anyone that is being sued for debt may know that wage garnishment is the result of having a judgment placed against you. If you are receiving disability benefits or Supplemental Security Income from Social Security, this may be your only source of income. If you are wondering if private disability payments can be garnished, they can. Although social security and disability benefits are protected, private disability payments are not.

It is good to note that some issues can arise if "exempt" benefits are mixed with other kinds of income. You will need to educate yourself and make sure you take proper steps to protect your private disability payments.

Creditors Can Collect Debts With Garnishment

If you have been sued by a creditor or debt collector and you lose, the creditor will win a judgment against you. After the judgment, the creditor is then given the authority to pursue garnishment to collect the debt. Each state has a different process based on the percent, the amount, and the type of funds that are subject to garnishment.

Most often, a clerk or sheriff will issue a writ of garnishment. This is then given to your employer or other entity that provides you with income. If the garnishment order meets the legal requirements, and you do not appeal it, then the funds will be directly given to the creditor.

File a response to debt collectors and protect your funds from garnishment.

Federal Restrictions on Garnishment

By federal law, Social Security and disability benefits are exempt from garnishment or bank levy. This means that the creditor will not garnish funds from its own payments. Although disability benefits are protected, private disability checks may be subject to garnishment. Whether or not your benefits are protected varies from state to state.

The Consumer Credit Protection Act has a nationwide legal limit on garnishment. This is up to 25 percent of disposable earnings or the amount of which earnings exceeds 30 times the minimum wage amount (whichever is less). Private disability benefits are considered earnings.

Exceptions to the Federal Restrictions on Garnishment

When it comes to debt, there are many different types of creditors. There are specific exceptions when it comes to garnishment, and this is in relation to child support collection agencies and the federal government. If you owe money to the IRS, your Social Security disability payments can be garnished.

The limit on these tax garnishments is 15 percent of the total payment and applies to student loans as well. Any other government creditors other than the IRS may not touch the first $750 of a monthly disability benefit.

Exemption for Social Security Income

Supplemental Security Income allows disabled individuals to obtain monthly benefits. As of 2015, the social security income is at $733. This program is not open to anyone who earns more than a specific amount or has a specific amount of assets. Because these benefits are made for people with little money, federal law bars garnishment on SSI benefits.

Respond to debt collectors in 15 minutes with SoloSuit.

Creditors Can Collect by Levying Your Bank Account

If you are involved with an unpaid debt lawsuit and you lose, then you may be subject to a bank levy. This is similar to wage garnishment, but not the same thing. Essentially, instead of taking money from your wages, money is diverted to a creditor through your bank account until the debt is satisfied.

Other Funds Exempted from Bank Levies

Federal law also protects some payments from bank levies. This includes:

  • Social Security benefits
  • Federal veterans benefits
  • Supplemental Security Income payments
  • Child support
  • Alimony payments
  • Unemployment compensation
  • Welfare benefits

If you want to protect these exempted funds, you must tell your bank of the source of these funds. If you mingle these funds with other non-exempt funds, there is no obligation for the bank to identify the funds. The bank can transfer any funds in the account to the creditor, up the judgment amount. They do not need to notify you at all, and you may only find out after it has happened.

Protections for Retirement Accounts

Although all checking and savings accounts are subject to a bank levy, retirement accounts can be protected. These accounts are protected under the Federal Employee Retirement Income Security Act. Employers also set up these accounts. Therefore, a beneficiary of an ERISA account cannot lose their right to those assets.

If you are going through a debt collection lawsuit, or you have a judgment placed against you, your assets, wages, and bank accounts may be garnished. Know your rights, and know which assets are protected by law.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James


Get Started


>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

Protect your veterans disability benefits

In addition to understanding the complexities of garnishment and bank levies, it's crucial for veterans receiving disability payments to be aware of their financial situation. If you're a veteran relying on disability benefits, it's important to know how much you're entitled to and how these benefits might be affected by debt collection practices. Using a veterans disability calculator can be an invaluable tool in managing your finances, ensuring that you are fully informed about your benefits and how to protect them. This tool can provide clarity on the amount you should receive, helping you to better plan your financial future and safeguard your income against potential garnishments.

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

Other debt settlement resources

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

How-to debt guides

Learn more with these additional debt resources