If you have unpaid, seriously overdue debts, which you have been court ordered to pay, one of the things your creditors can do is petition your state’s court system to allow a garnishment. When a writ of garnishment is issued, your assets can be frozen, allowing your creditors to clear out your bank accounts and garnish a percentage of your wages or other income. The amount of income which may be garnished varies somewhat from state to state.
If you have a legitimate objection to the garnishment, however, you can file an MC-49 (“Objections to Garnishment”) form with the court explaining your objections to the garnishment. In the case of Social Security Disability benefits and other income from the SSA, you have the right to object to garnishment of your assets on legal grounds.
For starters, your creditors cannot garnish your Social Security Disability benefits. Not only is it against the law for them to garnish such income, but it’s also against the law for them to tell you that they are going to do so, or to threaten you in any way with loss of your Social Security Disability benefits. Your Social Security Disability benefits, in a word, are safe from your creditors.
The MC-49 form is fairly self explanatory, though it is worth noting that you will want to check the box indicating that your objection to garnishment is because the property or funds garnished are exempt by Federal law. You must turn in your objection to the court within two weeks of the Writ of Garnishment’s date. To make sure that your objection reaches the court in time, send it by some form of secure, verifiable delivery. It’s also a good idea to make copies of your completed MC-49 for your own records.
Your creditors must leave your Social Security Disability payments alone. They must also return any funds which you can prove were received through Social Security Disability to your bank or other financial accounts. In most cases, you can avoid these funds from being garnished by filing your MC-49 as soon as possible after you receive notice of the writ of garnishment. If you do file your MC-49 late, however, and your creditors are able to seize money from your bank accounts or other assets, they are required by Federal law to return any money which you can prove you received through Social Security Disability benefits programs.
The one exception to this is if you owe money to the Federal government. Money owed to the Federal government may be garnished by the IRS after they have given you an opportunity to make other payment arrangements. The IRS may garnish as much as 15% of your Social Security Disability income until your debt to the Federal government has been satisfied. They cannot, however, begin garnishing your Social Security Disability income until they have notified you of your past due debt and given you ample opportunity to make other payment arrangements. As long as you make and honor an acceptable payment arrangement with the IRS, your Social Security Disability benefits will not be garnished.
In some cases, if you can demonstrate an inability to repay a debt to the IRS, you may be exempt from collection even if you owe the Federal government money. Generally speaking, you must submit detailed statements of your income and your living expenses, demonstrating that you don’t have enough room in your budget to repay anything. If the IRS agrees that you are incapable of repaying your federal debt, you will be issued hardship status and will not be required to repay your Federal debt with Social Security Disability funds.