If I’m on Social Security can my bank account be frozen?

Almost everyone has heard of the IRS freezing accounts to satisfy delinquent tax bills. Yet, even though they don’t have quite the same extent of power, many state laws do authorize private sector creditors to seize money from a consumer’s bank account after they have complied with certain procedures. This debt collection technique is called “garnishment”.

But before a creditor can garnish your bank accounts, they must establish that there is a valid debt and then obtain a judgment against you. Once it has done so, it can then petition the court to garnish your bank account and have those funds turned over to them to satisfy the judgment. However, typically only disposable earnings can be seized. This means that some assets are exempt from collection, including Social Security benefits. While a creditor cannot garnish such benefits directly, it can have a bank account “frozen.” Therefore to the extent that SS benefits are directly deposited into a checking account, they may be affected.

When a bank account is frozen, this means that a debtor cannot withdraw any money from the account. After a set period of time, usually 60-90 days, the money is then paid to the creditor. If an exempt asset is frozen, you may file an objection with the court during the waiting period and claim your exempt funds. In your case providing a copy of your Social Security award letter or other evidence of the amount of your benefits will do; you will also have to fill out a form(s). At that point your SS money will be released. However, any remaining non-exempt funds will be paid over to your creditor.