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Can a debt collector take my social security or veterans benefits?

Can a debt collector take my social security or VA benefits?

Generally no, debt collectors can’t take your social security or VA benefits directly out of your bank account or prepaid card.

After a debt collector sues you for the debt and wins a judgment, it can get a court order for your bank or credit union to turn over money from your account or prepaid card. This is called a “garnishment.” A U.S. Department of Treasury rule requires banks to automatically protect certain federal benefits from being frozen or garnished if they are direct deposited into your account. There are some exceptions to this rule, which are explained below. Read about how the automatic protection works.

Read more on consumerfinance.gov.

Benefits covered by garnishment

  • Social Security
  • Supplemental Security Income
  • Veterans
  • Federal Railroad retirement, unemployment and sickness
  • Civil Service Retirement System
  • Federal Employee Retirement System

Read more on consumerfinance.gov.

Your bank or credit union must automatically protects 2 months’ worth of benefits

If a collector tries to garnish money in your account, your bank must look at your account history to see if you received any of the above benefits by direct deposit in the last 2 months. The bank must protect 2 months’ worth of benefits from garnishment and let you use that money. If your account has more than 2 months’ worth of benefits, your bank can garnish or freeze the extra money. However, if that extra money that is garnished is exempt from garnishment under federal or state law, you may be able to go to court to have your money released.

Read more on consumerfinance.gov.