Can Debt Collectors go after my Social Security Disability or Retirement Money?
Debt collectors have limits on what they can do that are established by law. That mere fact alone, however, does not stop them for doing what is unethical and illegal such as going after the money held in bank accounts by social security retirement and Social Security Disability beneficiaries.
Basically, when banks receive orders of garnishment, they put a freeze on the individual bank accounts. This happens regardless of whether the money held in the account is from some other source, or is money that has been deposited by the federal government such as SSD. In effect, debt collectors have a way to get around federal law which prohibits the seizure of social security money and banks have been their willing accomplices.
All of that may be coming to an end. The Obama administration is now coming out with newly written rules that are designed to prevent banking institutions from seizing federal benefits, such as SSD and retirement. These rules will require banks to do the following: if they receive a garnishment order, they will be required to check the accounts held by the customer to see if federal benefits have been deposited at any time within the last two months. If federal benefits have been deposited, the bank will be required to protect those specific amounts from seizure.
I view this as a fantastic move by the current administration, something that prior administrations were remiss in addressing (probably wasn't worth their time, I suppose). After all, after finally being approved for disability benefits after possibly years of applications and appeals, why should someone even be in the position of being at the mercy of debt collectors when it is clearly illegal. It is the equivalent of kicking someone when they are down and I applaud the Treasury Dept for finally addressing this issue.
About the Author: Tim Moore is a former Social Security Disability Examiner in North Carolina, has been interviewed by the NY Times and the LA Times on the disability system, and is an Accredited Disability Representative (ADR) in North Carolina. For assistance on a disability application or Appeal in NC, click here.
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