Our new website is optimized for the most current web browsing technology. If you are using an older web browser, part of our website may not function properly as designed. Please consider upgrading your browser for an error free experience.
At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is how we get compensated.
At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is
See More
When you’re on Social Security disability, credit card debt can seem like an unavoidable and inescapable problem. Those on a fixed income often find themselves turning to credit cards to pay for basic necessities or unexpected expenses that their Social Security checks alone can’t cover. Then, once they’re in debt, their fixed income makes it difficult to fit credit card bills into their budget.
If this describes your situation, it’s important to learn as much as you can about the consequences of unpaid debt, what creditors can and can’t do, and what your options are. Let’s start with how debt collection works when a person receives disability benefits.
Can Creditors Garnish My Disability Benefits to Pay My Credit Card Debt?
In general, no — creditors cannot garnish your disability income to pay off your credit card debt. The law offers special protection for those who receive certain federal benefits, including Social Security disability. Because of rules the U.S. Department of Treasury set, your bank will automatically protect your disability income from creditors. However, some exceptions and limitations do exist:
Direct deposit. Your disability benefits must be direct deposited into your bank account or loaded onto a prepaid card. If you receive your benefits via a paper check and deposit the funds yourself, the bank does not have to protect your account from being frozen or garnished.
Two months. Only two months’ worth of Social Security income will be protected. When it receives a garnishment request, your bank will check your account history to see if you have received any disability benefits via direct deposit in the last two months. If you have, they will protect that amount of money. If your account contains more than two months’ worth of benefits, the bank can garnish or freeze the extra amount.
Government debts. This protection does not apply to government debt and child or spousal support. Although your disability benefits will generally be protected in the case of credit card debt, they can sometimes be garnished to pay government debts, such as back taxes or student loans, and child or spousal support.
As an example, let’s say you receive $1,000 of Social Security disability benefits per month and your account balance is currently $4,000. As long as your benefits are being direct deposited into your account, your bank will automatically protect $2,000 in your account from being frozen or garnished by creditors, so you can keep paying your bills. The extra $2,000, however, could be subject to garnishment.
How Does the Garnishment Process Work?
It’s important to note that debt collectors, including credit card companies, cannot garnish your bank account or ask the bank to freeze your account without a court judgment. To start this process, the debt collector will sue you for the debt. If he or she wins the case, the debt collector gets a judgment of debt against you. After that, the debt collector can get a court order requiring your bank to garnish money from your bank account or prepaid card. The bank will automatically protect at least a portion of your disability benefits, following the rules outlined above.
Keep in mind that if you are sued for a debt and don’t show up to court, the creditor will automatically win a default judgment. In addition, if your bank garnishes or freezes any of the money in your account, you will receive a notice of garnishment. Depending on the source of your income and other factors, you may be able to claim an exemption. The notice of garnishment may explain how to do this. Once you take the proper steps to claim an exemption, a judge will decide whether your money should be handed over to creditors.
What Should I Do If My Account Is Frozen or Garnished?
If your account is frozen or garnished and the source of your income is Social Security disability benefits, you should inform the creditor, the court, and the bank of that fact immediately. You can use a sample letter from the Consumer Financial Protection Bureau to inform creditors that your income is protected from garnishment.
Recommended
What Debt Relief Options Do You Have?
Want to look at what you can do to resolve your debt?
You should also seek help from an attorney. A lawyer can look at your specific situation — including your income sources and the laws in your state — to determine how much of your income and which of your assets are protected. A lawyer can also advise you of any steps you should take.
Can I Pay Off My Credit Card Debt?
If you have the financial means to pay off your credit card debt, that may be the simplest option. However, most people who receive Social Security disability benefits are on a fixed income that doesn’t leave much room for making debt payments. In that case, attempting to pay off your debt may not be feasible. However, you may be able to work with a debt relief company to help resolve your debt.
In the event you cannot afford to pay your debt, the following facts are worth noting:
People who receive Social Security disability benefits are generally considered “judgment proof.” This means that even if your creditor receives a judgment against you, his or her options for collecting what you owe the creditor are limited.
Only the actual cardholder is responsible for credit card debt. If you cannot pay off your credit card, that burden will not be transferred to your loved ones after you pass away. Unless a family member cosigned your account, the debt will not be passed on to anyone else.
You don’t need to file for bankruptcy to get creditors to leave you alone. Under the Fair Debt Collection Practices Act, you can write a cease and desist letter to a debt collector. Upon receiving this letter, the collector must stop all contact by phone or mail.
You generally shouldn’t sell off assets to pay your debt. Even if some of your assets are not protected from debt collectors, companies will rarely attempt to claim your assets. Doing so requires a complicated and expensive legal process that typically isn’t worth the trouble for creditors. Plus, if you’re on a fixed income, replacing any assets you sell will be difficult.
If you’re interested in working with a debt relief company to settle your debt, Solvable can help. Take our eligibility quiz to learn about any special programs you may qualify for, or call 855-391-9733 for a free, zero-obligation consultation.
Solvable is a for-profit company. But a free service for consumers. Partners cannot pay us to guarantee favorable reviews or ratings. We do not publish favorable (or unfavorable) reviews or assessments at the direction of an advertiser or partner. We always work to put consumers first and do our best to provide value in meaningful ways. We only work with companies that put the consumer first too.
How We Make Money
Solvable is compensated by some of the companies seen on our website. Most often, Solvable receives fees when one of our readers clicks, fills out a form, applies for, or receives a financial product from one of our partners. We also earn fees for capturing consumer stories and writing about them, displaying advertising, having our partners sponsor certain parts of the site, and writing content that may be relevant to our partner and their audience. This compensation may impact where products appear on this site, including article pages, comparison listings, the order in which they appear or if they will even appear on a given page, and our matching recommendations. Solvable has not written about, reviewed, or rated all financial products available to consumers.
In addition, we may be compensated in the following ways as well:
Referrals to consumers who use the online form or locator line that may provide expert answers to questions;
Marketing tax resolution, credit correction, student loan, consumer law services such as FDCPA and bankruptcy assistance;
Ads served through companies such as Google (We don’t totally control all of the specific ads that appear on our site.);
Referrals to services that help consumers with tax resolution, credit correction, student loan, consumer law services such as FDCPA and bankruptcy assistance and that may negotiate settlements on their debts
We do recommend that you shop around and compare services and costs with other companies while performing your own due diligence, especially since people’s experiences with companies can change over time.
Free Solvable Services
The offers that you are matched up with are from companies or attorneys/law firms that we may receive compensation from. Based on our initial review of such companies or individuals, we feel comfortable introducing them to our readers. We won’t recommend something just because we’re offered payment to endorse or promote it. However, we do recommend that you shop around and compare services and costs with other companies while performing you own due diligence, especially since people’s experiences with companies can change over time.
We may be compensated for the following:
Referrals to consumers who use the online form or locator line that may provide expert answers to questions;
Marketing tax resolution, credit correction, student loan, consumer law services such as FDCPA and bankruptcy assistance;
Ads served through companies such as Google (We don’t totally control all of the specific ads that appear on our site.);
Referrals to services that help consumers with tax resolution, credit correction, student loan, consumer law services such as FDCPA and bankruptcy assistance and that may negotiate settlements on their debts.
We are not attorneys and we don’t provide legal advice. As always, we encourage you to do your homework and check out individuals and companies before you hire them. If you are already working with an attorney, we urge you to ask them your questions. After all, they will be familiar with your situation and the laws in your state.
We hope that you find solvable helpful in your efforts to get a fresh start.
Personal Loans Advertiser Disclosure
The Personal Loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all Personal Loan companies or all types of offers available in the marketplace.
Personal Loan Providers determine the underwriting criteria necessary for approval. You should review each Provider’s terms and conditions to determine which loan works best for you and your own personal financial situation. All reasonable efforts are made to provide and maintain accurate information. All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each Provider’s or affiliates discretion. There is never a guarantee you will be approved for credit or that upon approval you will qualify for the advertised rates, fees, or terms that were shown.
Be sure to speak with your representative about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask up front about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $35,000 may be available through participating lenders or affiliates; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. In some cases, lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Ask your representative for details.
Credit Card Advertiser Disclosure
The card offers that appear on this site are from companies or affiliate offers from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear). solvable does not include all card companies or all card offers available in the marketplace.
Credit Card Providers determine the underwriting criteria necessary for approval. You should review each Provider’s terms and conditions to determine which card works for you and your personal financial situation. Information is provided by the Credit Card Providers and is not a guarantee of approval.
All credit card rates, fees, and terms are presented without guarantee and are subject to change pursuant to each Provider’s discretion. All reasonable efforts are made to provide and maintain accurate information. There is no guarantee you will be approved for credit or that upon approval you will qualify for the advertised rates, fees, or terms shown.
Any opinions, analyses, reviews or recommendations expressed in articles, marketing materials or otherwise are those of the author’s alone and/or solvable, and have not been reviewed, approved or otherwise endorsed by any Credit Card Provider.
See the online Provider’s credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the “Apply Now” button, you can review the credit card terms and conditions on the provider’s website.
Business Loans Advertiser Disclosure
Business Loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all Business Loan companies or all types of offers available in the marketplace.
Business Loans are those loans that are for commercial use and any property and/or proceeds from the proposed request will be used by the requestor for commercial purpose only and not for any personal, family or household purposes.
Most of our Business Funding Partners or affiliates, do not require collateral for business loans; however, please note that it is possible to be offered another product by the lender depending on your needs and if the underwriting requirements dictate the same. Traditional bank and SBA loans generally are known for collateral requirements.
There is no one-size fits all business loan. Rather there are several types that will likely be offered and or discussed with you upon completing your request. Business Funding Partners determine the underwriting criteria necessary for approval, you should review each Partner’s terms and conditions to determine which business funding option works for your business’s financial situation. All reasonable efforts are made to provide and maintain accurate information. All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each Partner’s discretion. There is never a guarantee your business will be approved for credit or that upon approval your business will qualify for the advertised rates, fees, or terms shown. Lender terms and conditions will apply and all products may not be available in all states. Ask your loan representative for details.
Student Loan Refinancing Advertiser Disclosure
Student loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all student loan companies or all types of offers available in the marketplace.
Pursuant to the contracts between solvable and the Partners or affiliates on its Network, solvable may also receive information from the Partner or affiliate regarding the status of your application including, but not limited to, the amount or disposition of your loan. Information specific to the Partner/affiliate’s use of your information will be found in their specific Privacy Policy.
Potential savings may vary based on the interest rates, balances and remaining repayment term of the loans you are seeking to refinance. Your overall repayment amount may be higher than the loans you are refinancing even if your monthly payments are lower. Variable rate options will fluctuate over the term of your loan with changes in the LIBOR (or other index utilized by the lender) rate, and will vary based on applicable terms and presence of a cosigner. Fixed interest rates may be based on applicable terms and presence of a co-signer. Additional terms and conditions, and rates are subject to change at any time without notice and may not be available in all states or for all types of current student loans. Such changes should only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Lenders are required to provide every potential borrower with disclosure information before they apply for a private student loan. The Lender you select is required to provide you with an Application Disclosure and an Approval Disclosure within the application process before you accept the terms and conditions of your loan. solvable is not a lender or creditor, it does not offer, extend or alter credit terms. Only participating lenders can perform the full application and deliver the required disclosures, please ask your lender about rates, terms, fees, and potential discounts that may be available for each product.
Please Note:
Certain federal and private student loans may not be eligible for consolidation/refinance.
Certain consolidation/refinance plans may result in higher monthly payments or negative consequences (i.e. prepayment penalties).
Consolidation/refinance may lead to other negative results, such as loss of grace periods.
Loans in default generally cannot be consolidated until completion of a repayment trial plan so tell your lender if you are in default and determine relevant options (be wary of those asking for upfront fees as well)
Other options or programs may fit your needs (i.e. personal loan, debt consolidation and/or debt relief). Consult your financial and/or tax advisor prior to making any decisions.
Solvable is not a creditor as it does not offer, extend or alter credit; rather it is an online market lead generator that allows consumers to shop and compare rates, terms and costs associated with financial products such as mortgages, auto loans, personal loans, student loans, etc. solvable does not originate or fund any product it markets; rather it has a network of lenders or Partners/affiliates. You may choose to speak with one or more of these lenders or Partners/affiliates to determine what your actual terms and savings may be. Only a lender can provide you with a formal application for credit, your inquiry form here is merely an expression of interest and/or intent to obtain credit or assistance. You must discuss your actual credit situation and fill out the lender’s required documents prior to obtaining an extension of credit. Network lenders may not have the best or the lowest rates so you are encouraged to continue to shop and compare additional lenders, credit unions, local financial institutions, etc. to ensure you are truly getting your best deal for your situation.
You should contact your tax professional or other financial advisor to determine if you can actually realize savings by refinancing when it can extend the life of your current loan. You should ask the lender about all terms, rates, fees and costs associated with each product and if you will realize a net tangible benefit from the same. All initial estimated savings is done by trying to calculate what your rate may be; however, solvable does not have that information and cannot guarantee potential savings or that lenders will approve you for such product that would warrant those savings. Rates are not guaranteed and change daily. Lenders/Brokers/Dealers/Partners that perform the actual underwriting will have to determine if you meet their underwriting criteria which is unknown to solvable at the time of matching/offer/quote delivery. All amounts are estimates and examples only and do not represent an actual offer.
Download Now!
Thank you for your information.
We will get back to you soon.
Recommended
Recommended
