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Sounds like nonsense, but I'll subscribe just to follow along.
US News has this: "Private debt collectors, such as credit card companies and banks,
can't garnish your Social Security benefits.
Section 207 of the Social Security Act prohibits debt collectors or a bankruptcy court
from dipping into your bank account to take Social Security money
for purposes of paying off what you owe."
Google is your friend so search and you will find true information.
I've heard if you have your benefits on it's own account it's protected from any bill collectors. True?
Yes, that is true. Banks won't allow a creditor to levy your bank account, if the only deposits in it are monies that are protected from judgments - which would be your social security deposit, with some exceptions.
Just never mix other deposits into that account. If it's not clear that all of the money is from SSA, then it can be levied, and then you would have to prove how much was protected money and how much wasn't - which they could then take. And, if it gets levied, the bank also charges you a fee for dealing with the levy.
Here's a good article on it by the Nolo Press website that explains exceptions, limits on how much can be protected (just 2 months worth of deposits, so best not to keep more than that much in the bank), etc.:
"At a Senate Committee hearing this week, the Government Accountability Office, a research arm of the Congress, reported that 155,000 people last year had their Social Security checks docked to pay off a delinquent student loan. ."
"At a Senate Committee hearing this week, the Government Accountability Office, a research arm of the Congress, reported that 155,000 people last year had their Social Security checks docked to pay off a delinquent student loan. ."
Yes, but Student Loans are an entirely separate classification of debt. They are the only debt that cannot be dismissed via bankruptcy. Realizing there are both Government Loans and Private Loans used for Student Debt, I don't know if the two types are treated the same. Possibly private loans without a government guarantee can be dismissed in bankruptcy and not be subject to SSA garnishments.
Yes, enjoy those student loans in your youth. Pay for them out of your SS check.
But only if your income is too high for a deferral based on income. I have student loans that are in good standing, but they've been deferred for years since I became disabled. Every year I need to reapply for a deferral, proving my income.
And then, if your income is too high, you can still get them to give you payments based on your income. And there are laws regarding how much of your SS money can be garnished for student loans. It's a pretty small percentage. They won't leave you homeless.
The trick is to never default on them. As long as you communicate with them and don't default, they're actually really easy to deal with and fair, in my experience.
We had an employee who owe a lot in taxes. He said the govt took a tiny bit out of his SS every month but he would die long before the taxes were paid off.
He worked for us part time, got a w9 every year. We paid taxes on him. Don't know why they never came after those taxes by garnishing his wages?
The IRS usually does work with you if you owe back taxes. They allow you to make payments depending on your income. If you are low income you can pay a small amount every month if they agree to that. The flip side is that if you don't pay enough, the amount you owe constantly increases because of interest and penalties.
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