Federal Government Garnishment of Social Security Benefits Effective May 1, 2011, a new Federal regulation requires that banks which receive a garnishment order for an account into which Social Security, VA, Railroad Retirement, or Federal pensions have been deposited, must look more closely before honoring the garnishment order. The bank has to figure out the sum of such Federal benefit payments that have been deposited to the account during a two month period, and must ensure that the account holder has access to an amount equal to that sum or to the current balance of the account, whichever is lower. Under this new regulation, you do not forfeit your protection from garnishment by mingling your Federal checks with other money -- but there are limits on the amount of money in your account that's protected from garnishment. If a creditor other than the federal government tries to garnish your Social Security benefits, inform them that such an action violates Section 207 of the Social Security Act (42 U.S.C. 407). Section 207 bars garnishment of your benefits. It can also be used as a defense if your benefits are incorrectly garnished. SSA has responsibility for protecting benefits against garnishment, assignments and other legal processes usually ends when the beneficiary is paid. However, once paid, benefits continue to be protected under section 207 of Act as long as they are identifiable as Social Security benefits. However, the creditor may go after your bank account or other assets. You may lose the federal Social Security protection if you co-mingle your SSA money with other monies. Check with an attorney in your state. Also, please note that as far as mortgage debt goes, if your mortgage is via a VA loan then The Debt Collection Improvement Act of 1996 also gives the VA authority to garnish the Social Security benefits of people who owe the VA money. This means that the VA can take your Social Security benefits until the amount you owe has been fully repaid.
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