Student Loan Debt & Your Social Security Benefits

by DeLadurantey Law Office, LLC on October 23, 2014

all your eggs in one basketIf you have student loans that are in default (no matter how long ago) and you are eligible to receive Social Security, the federal government has the authority to garnish your benefits. It should be noted that private lenders do not have this ability. Although Social Security payments are protected in bankruptcy filings and other collection matters, the Debt Collection Improvement Act of 1996 provides the government the power to offset your benefits to pay your defaulted student loans.

Fortunately, there are certain limitations on the federal government’s ability to offset your Social Security benefits. The initial $750 you receive each month (or a total of $9000 each year) is protected. Also, the maximum amount that can be garnished is 15% of your total benefit payments.

You must be provided written notice before the government can offset your Social Security payment. You should contact us as soon as you receive this notice. You typically have only twenty days from the date the notice was received to request a review or an oral hearing. We can immediately begin reviewing your finances in order to determine if we can establish financial hardship. We will also assist you with negotiating a repayment plan with the lender prior to the garnishment.

It is important to understand that Supplemental Security Income (SSI) cannot be offset to pay your federal student loans. If a debt collector threatens to seize your SSI, you should contact us. A collector that makes this type of claim has violated the Fair Debt Collection Practices Act (FDCPA) and you may be able to sue and recover damages.

If you are considering filing for bankruptcy protection or you need assistance with your student loans, call DeLadurantey Law Office, LLC, at (414) 377-0518. We believe that each client should receive the individual attention necessary to reach their financial goals. Recognizing the needs of working clients, we maintain a flexible schedule and offer evening appointments. Initial consultations are always free, and phone inquiries are always welcomed. Find us on the Internet and on Facebook.

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