Qualifying for social security disability can be a time-consuming process. The Social Security Administration has struggled to handle the increasing number of disability cases. While awaiting a Social Security Disability or Supplemental Security Income decision many applicants lose their homes, file for bankruptcy and accumulate debt.
Once you start receiving Social Security Disability Income (SSDI) or Supplemental Security Insurance (SSI) payments you may wonder whether your payments are safe from creditors and debt collectors.
In general, SSDI and SSI payments are protected from creditors. However, exceptions exist for past-due child support, past-due taxes and federal student loans. Debt collectors can also still seek a garnishment court order for your bank account.
Federal rules prevent banks from seizing the portion of the funds in your account that came from SSDI and SSI payments. Unfortunately, several situations exist where your benefit payments might not be protected:
- Deposit of a paper SSDI check. Banks and credit unions are only required to look for direct deposit payments identified as Federal SSDI or SSI payments.
- More than two months of benefits in your account. Banks and credit unions are only required to look at funds deposited in the last 60 days. If benefits accumulate for several months, payments outside the 60-day window will not be protected.
- A lump-sum, retroactive payment deposited over 60 days ago. A lump-sum payment deposited in the 60-day window is protected. Unfortunately, if the lump-sum payment was deposited more than 60 days before the garnishment order is received by the bank or credit union, you will lose access to your funds until you challenge the order.
If you receive SSDI or SSI payments an experienced disability attorney can provide more information regarding how your benefits may be protected from creditors.
