It is not unusual for many seniors to find themselves still dealing with debt even after they retire. Unfortunately, high debt is a trend that has increasingly become more common as more seniors try to manage daily living expenses and medical care on a fixed income while trying to pay off what they owe. A common question many seniors ask when faced with this situation is “Will creditors garnish my social security and retirement benefits?”.
The answer to that question depends on who your debt collector or creditor is. Banks and other financial institutions cannot garnish your federal benefits. Other creditors seeking payment for medical bills, payday loans, or personal loans – for example – are also not permitted to take a cut of your federal benefits. That includes SSI (Supplemental Security Income), Veteran’s benefits, civil service, and federal retirement benefits, disability, service member pay, military annuities, survivor benefits, federal student aid, railroad retirement benefits, and financial assistance received from FEMA.
What if You’re Still Employed?
Keep in mind that if you are still working, these creditors can garnish your wages and other assets that you may own, but the law protects your social security check and other benefits from being garnished. However, things change if your creditor is the IRS or the federal government.
If you owe federal income taxes, federal student loans, child support and/or alimony, any sort of non-tax debt owed to other federal agencies, have defaulted on federal home loans, or are under certain civil penalties, then the government can garnish your retirement benefits, and the IRS can do so without needing to go to court.
Is There Help Available?
As bad as all of this may sound, if you believe you are at risk of having your retirement benefits garnished, the best solution is to speak to an attorney to understand your options. At the Johnson Law Firm, PC, we recommend that every client starts planning for their retirement years as soon as possible. When you have worked hard all of your life, you want to make sure you will have enough to care for yourself and to leave behind a legacy for your loved ones.
Are You Already Dealing with Garnishment?
If you are already in an unfavorable position dealing with potential garnishes, it is important to know the laws and rules affecting you and an attorney can help you come up with a strategy to deal with this issue. But if you can, early planning is key to have a worry-free retirement. There are many estate planning and care planning tools available to help you put aside enough funds for your care or emergencies. You don’t need to be wealthy or have a high net-worth to seek the help of an estate planning and elder law attorney or to visit a financial advisor. If you are a senior and would like to learn more about how an Elder Law attorney can assist you, contact the Johnson Law Firm, PC, today.