“Did you know that Social Security and VA benefits are generally protected from garnishment to pay a debt to a private person or company?”
To learn more about how most debt collectors cannot garnish money in your bank account to pay a debt, download the following fact-sheet, provided by the Consumer Financial Protection Bureau (CFPB): Consumer Advisory: Your Benefits are Protected From Garnishment. The fact-sheet also provides information on which benefits are protected from garnishment and what to do if your money is frozen.
Quick Facts from the CFPB on how the federal protection works:
— Banks must automatically check your account history to see if Social Security or VA benefits were direct-deposited to your account in the last two months.
— If so, your bank must protect two months’ worth of benefits in your account and let you use that money.
— If your account has more than two months’ worth of benefits, your bank can freeze the extra money.
Consumers can also use the new sample letter, provided by the CFPB, to tell a debt collector that their Social Security or VA benefits are protected from garnishment.