Social Security is Safe From Collectors
Authored By: Legal Aid Services of Oklahoma, Inc.
Federal law makes your Social Security benefits exempt from almost all creditors claims. Even a creditor with a legal judgment against you cannot intercept your Social Security payments nor take the money from you after you receive it.
There are only four exceptions to this protection. No form of income is exempt from these obligations:
· student loans,
· correcting overpayments, and,
· child support.
Sources of income that are exempt:
Generally, a creditor may not take (or garnish) payments from:
· Veterans benefits,
· Workers' compensation benefits,
· Unemployment benefits,
· Child support payments,
· Personal injury awards,
· Health and disability insurance payments,
· Alimony payments,
· Welfare payments,
· Pension and retirement benefits, and,
· Most retirement plans, pensions and 401(k) plans.
These sources of income are protected automatically by law. You do not need to file for bankruptcy to protect these assets.
You MUST respond to court papers that your account is being 'garnished' by a creditor.
It is up to you to tell the judge that your account is exempt because of one of the above types of income.
If you own your own home…. Know what can happen
Oklahoma has laws to protect the home you own and live in, and the land it sits on. These "homestead laws" help families with financial problems.
In Oklahoma, a creditor can go to court, get a judgment and file a lien against your home. A creditor cannot take your home or force you to sell your home or land you live on. BUTthese liens have interest charges that continue to growuntil paid by you, or paid when you sell your home or is discharged by a bankruptcy court.
A creditor can try to collect a judgment but cannottake:
· Tools which you use in your trade or farming up to $10,000.00,
· Household goods and furniture,
· Clothing up to $4,000.00 in total value,
· One car up to $7,500.00 in equity,
· Personal books, photos, or portraits,
· Wedding or anniversary rings up to $3,000,
· Prescribed health aids for you or spouse or child,
· A personal computer used for household purposes, and,
· Up to 75% of current wages earned within the last 90 days (except that up to about 67% maybe taken for child support).
This is only a partial list of property exempt from "attachment" by creditors under Oklahoma law.
See a lawyer or debt counselor for more complete information.
To protect self-employment or small business income:
If a debtor claims an exemption for tools used in a business or trade, the debtor must prove he actually uses them in his business or trade.
To protect family income:
If "support" income is claimed, the debtor may be called upon to prove that the total amount is "reasonably necessary" for support of himself and his family.
To protect family necessities:
A lawnmower may qualify for an exemption if you have a lawn, but it may not qualify if you live in a condominium. You are entitled to a television in your home, but not one in each room.
Collectibles, jewelry, rental or vacation homes and most sporting equipment are NOT exempt.
Guard your assets
If you get money that is exempt (see inside), keep that money in a separate account.
· Do not mix this money in with money from other sources! You could lose your legal exemption.
· Write checks from the separate account.
· You may have to file papers in court to prove or protect this type of income. Keep good records and a separate account.
LIMITATION on exemptions...
· Workers compensation or personal injury awards are exempt only up to $50,000.
· Personal injury awards are exempt to the extent that they are recoveries for injuries to the body. Punitive damages, property damages, and other non-bodily injury awards are not exempt.
· Child support and alimony are exempt onlyto the extent "reasonably necessary" to support child or ex-spouse.
YOU MUST PAY...
· Your taxes and other legal assessments on your homestead. Your homestead exemption will NOT stop the bank from foreclosing on the mortgage and taking your home if you don't make the payments.
· For work or materials used in constructing improvements on your property. The creditor may go to court, get a judgment and file a lien on your home. He cannot force you to sell it, BUT any lien has interest that continues to grow until paid by you, or paid when you sell your home or discharged by a bankruptcy court.