Know Your Rights Regarding Garnishment and Your Social Security Benefits

Learn with Our Attorneys the Eligibility Criteria for SSDI/SSI and the Types of Family Law Issues That Can Lead to Garnishment in NJ

Do you fear that your social security benefits may be garnished to collect an old debt? Garnishment is a stressful prospect for those who are already on a fixed income. In these situations, knowledge is power. Understanding what garnishment is and when and by how much your social security benefits can be garnished will prepare you to deal with this prospect in the best way possible—head on.

Understanding Garnishment Under NJ Law

Garnishment occurs when a creditor is legally empowered, by court order or another operation of law, to collect a debt from an individual’s paycheck or other source of income. If your wage or a government benefit like Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) are garnished, then a certain amount will be automatically withheld from your check and paid to the creditor instead.

At What Point Can New Jersey Authorize the Withholding of Social Security Benefits?

First, let’s start by clarifying the difference between Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI). SSDI provides assistance to individuals who have acquired a medical disability that will prevent them from being able to work for at least 12 months. To be eligible, the individual must have worked previously and made contributions to the Social Security system. Finally, to receive SSI benefits, an individual may not have any substantial gainful activity or engage in work that generates income above the limit set by the Social Security Administration.

SSI, on the other hand, does not have a work history requirement, which makes it an essential resource for those who become disabled at a young age or lack enough work history to qualify for SSDI for some other reason. To be eligible for SSI, an individual must have also acquired a disability that will prevent them from working for at least 12 months. However, SSI does not have a work history requirement because it is a need-based program. Recipients of SSI must have income and resources that fall below the federal benefit rate for quality.

Whether a creditor can garnish your SSDI or SSI benefits and how much they can garnish depends on the type of debt. Social security checks cannot be garnished to satisfy credit card debt or medical bills. However, if you are behind in child support or alimony, your social security benefits can be garnished to satisfy your arrears. If you have no other children or spouse to support, then your benefits can be garnished by up to 50% for child support or alimony arrears.

If you have federal tax debt, then the IRS can garnish up to 15% of your social security benefits. Social security benefits can also be garnished by up to 15% to satisfy federal student loan debt that the individual has defaulted on.

Explore the Methods to Safeguard Your Social Security Benefits

If your social security benefits are garnished directly through the Social Security Administration, they will not be garnished retroactively. This means that any payments that you have already received will not be taken back, but the SSA will hold back a portion of your check for any garnishment that is ordered. As discussed above, there are certain types of debts that can lead to a direct garnishment of your social security benefits. However, other creditors may seek to seize your bank account through court order to satisfy a judgment against you. To protect social security benefits from seizure in that case, you must ensure that your social security benefits are directly deposited into an account that only contains those benefits and is not commingled with income or funds from any other source. Then, creditors will not be able to seize the bank account that contains those benefits.

What is the Definition of “Judgment Proof”?

An individual is “judgment proof” if their income and assets are so minimal that they are essentially exempt from garnishment. However, that does not mean that the underlying debt will go away. If and when the individual’s financial situation changes, they may no longer be judgment proof and their income may be subject to garnishment.

Process to Appeal a Garnishment Order in New Jersey

If you believe that a garnishment order was improperly issued against you or if you dispute the debt that the garnishment is based on, then you have a right to appeal the garnishment; however, you cannot appeal to the Social Security Administration. You must file your appeal through the proper avenues of the institution that holds your debt. If your benefits are being garnished due to child support or alimony arrears, then you must appeal the decision with the upper court of the court that filed the order. If the garnishment is due to tax debt, then you must appeal the decision through the IRS.

Contact Our Brick Lawyers for Concerns about Social Security Benefits in Your NJ Family Law Case

If your Social Security benefits are under threat of being garnished, there are several important ways that an attorney at The Bronzino Law Firm can help you, including disputing the debt, negotiating a settlement or payment plan, or helping you to file an appeal against the garnishment. If you believe that a debt has been improperly applied to you or that the amount is incorrect, then our family lawyers can help you determine the appropriate course of action. It might feel as if your debt is insurmountable, but depending on your overall financial situation and the amount of debt you owe, a skilled family law attorney at our Brick or Sea Girt office may be able to help you handle your case.

Finally, facing the garnishment of your social security benefits can quickly leave you feeling hopeless, but proactively facing the situation and identifying methods for achieving relief, like an appeal of the garnishment, may be the best path forward for you. An experienced New Jersey attorney can help you develop a strategy that meets your needs and serve as an advocate for you anywhere in Freehold, Red Bank, Tinton Falls, Belmar, Toms River, Sea Bright, and elsewhere in Ocean and Monmouth County. Consult an experienced lawyer by calling our Sea Girt or Brick office at (732) 812-3102 today.