Jurisdiction:
Area of Law:
Question:
Selected Answer:
Submitted by DakotaLegal on
All Comments
Submitted by DakotaLegal on
It’s safe to say you’ll have at least some protections from losing all of your disability to a court judgment. The complete answer, though, is going to depend on a combination of two facts: (1) the source of the disability payments and (2) the amount of the judgment. Many retirement funds or disability payments are completely sheltered from most types of court judgments…but child support and some debts to the government are exceptions to that rule.
Whether the disability fund is from the federal or state government can also make a difference.
Getting Some Affordable Legal Help
Most people on disability meet the income guidelines for most state legal service programs. Here’s one place to look for affordable legal options: http://www.alabamalegal help.org/find-legal-help/directory.
You also may want to review your rights through Alabama’s “Protection and Advocacy” agency. This agency offers no-cost legal help to protect state and federal rights you may have, based on your disability. They can be reached either through the intake form on their website (http://www.adap.net/ ) or by calling them toll free from within Alabama: 1-800-826-1675.
Federal Rules
The most common question about protecting disability payments from creditors comes with Social Security disability, or SSDI. Almost no “creditor” other than the federal government can garnish your Social Security benefits. If they try, they are probably breaking the law— specifically, Section 207 of the Social Security Act (42 U.S.C. 407). There are some differences between the program you use, though — whether SSDI (disability insurance) or SSI (Supplemental Security Income). In fact, several types of income are usually exempt from collection… disability payments, retirement accounts, pensions, veterans benefits, most public assistance, unemployment and workers compensation, alimony and child support payments.
Only the federal government can legally garnish your (SSDI or SSI) disability payments. Reasons the feds use may include back taxes or a defaulted student loan. SSDI disability benefits may be used to pay child support obligations. If you’re getting SSI, though, it can’t be taken for child support, student loans, or even unpaid taxes.
Despite the rules, Social Security disability and SSI money is sometimes illegally garnished or taken from someone’s bank accounts. It used to be worse, and banks were often very sloppy in taking people’s SSI/SSDI payments for a court judgment. So a recent federal law was passed to force banks to review your account, before garnishing any money, to see if Social Security funds were deposited in your account.
The federal law (Section 207) is supposed to absolutely stop most garnishments of your benefits. Having said that, unlawful garnishments still do happen. Social Security will also tell you that their “responsibility” will end once you were paid the benefits. The good news is that your benefits are still protected under section 207 of the Social Security Act, just as long as the monies are still somehow clearly identifiable as your Social Security benefits. For example, you might decide to put SSI/SSDI into a separate account that is clearly set up, only for disability payments.
Alabama State Rules: A “Judgment Lien”
For the most part, Alabama’s state laws generally protect disability payments, too. About the only way a state court judgment can be used to garnish your disability is if it’s part of a special victim restitution case. http://ssa-custhelp.ssa.gov/app /answers/detail/a_id /1712/kw/SSDI%20garnishment.
The importance of Alabama state law will come into play if the “disability” payments you receive are not from the federal government, but are from a private fund or ‘third party’ system. Keep in mind, Alabama law allows a judgment lien, that can force sale of some of your property. http://law.onecle.com/alabama/civil-practice/6-9-211.html. You have some options to stop certain property sales, too, such as the homestead exemption (if you own your home). If that’s the situation you find yourself in, it’s especially important to get legal advice immediately.
It’s safe to say you’ll have at least some protections from losing all of your disability to a court judgment. The complete answer, though, is going to depend on a combination of two facts: (1) the source of the disability payments and (2) the amount of the judgment. Many retirement funds or disability payments are completely sheltered from most types of court judgments…but child support and some debts to the government are exceptions to that rule.
Whether the disability fund is from the federal or state government can also make a difference.
Getting Some Affordable Legal Help
Most people on disability meet the income guidelines for most state legal service programs. Here’s one place to look for affordable legal options: http://www.alabamalegal help.org/find-legal-help/directory.
You also may want to review your rights through Alabama’s “Protection and Advocacy” agency. This agency offers no-cost legal help to protect state and federal rights you may have, based on your disability. They can be reached either through the intake form on their website (http://www.adap.net/ ) or by calling them toll free from within Alabama: 1-800-826-1675.
Federal Rules
The most common question about protecting disability payments from creditors comes with Social Security disability, or SSDI. Almost no “creditor” other than the federal government can garnish your Social Security benefits. If they try, they are probably breaking the law— specifically, Section 207 of the Social Security Act (42 U.S.C. 407). There are some differences between the program you use, though — whether SSDI (disability insurance) or SSI (Supplemental Security Income). In fact, several types of income are usually exempt from collection… disability payments, retirement accounts, pensions, veterans benefits, most public assistance, unemployment and workers compensation, alimony and child support payments.
Only the federal government can legally garnish your (SSDI or SSI) disability payments. Reasons the feds use may include back taxes or a defaulted student loan. SSDI disability benefits may be used to pay child support obligations. If you’re getting SSI, though, it can’t be taken for child support, student loans, or even unpaid taxes.
Despite the rules, Social Security disability and SSI money is sometimes illegally garnished or taken from someone’s bank accounts. It used to be worse, and banks were often very sloppy in taking people’s SSI/SSDI payments for a court judgment. So a recent federal law was passed to force banks to review your account, before garnishing any money, to see if Social Security funds were deposited in your account.
The federal law (Section 207) is supposed to absolutely stop most garnishments of your benefits. Having said that, unlawful garnishments still do happen. Social Security will also tell you that their “responsibility” will end once you were paid the benefits. The good news is that your benefits are still protected under section 207 of the Social Security Act, just as long as the monies are still somehow clearly identifiable as your Social Security benefits. For example, you might decide to put SSI/SSDI into a separate account that is clearly set up, only for disability payments.
Alabama State Rules: A “Judgment Lien”
For the most part, Alabama’s state laws generally protect disability payments, too. About the only way a state court judgment can be used to garnish your disability is if it’s part of a special victim restitution case. http://ssa-custhelp.ssa.gov/app /answers/detail/a_id /1712/kw/SSDI%20garnishment.
The importance of Alabama state law will come into play if the “disability” payments you receive are not from the federal government, but are from a private fund or ‘third party’ system. Keep in mind, Alabama law allows a judgment lien, that can force sale of some of your property. http://law.onecle.com/alabama/civil-practice/6-9-211.html. You have some options to stop certain property sales, too, such as the homestead exemption (if you own your home). If that’s the situation you find yourself in, it’s especially important to get legal advice immediately.