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Are my Social Security benefits exempt from bankruptcy?

Many Ohio residents who plan on filing for bankruptcy don't need to worry about losing their Social Security benefits in the process. Nevertheless, the Social Security Administration does recognize certain exceptions to the bankruptcy exemption rule for benefits. The agency also cooperates with other government entities when deciding whether or not benefits should receive protection.

According to the government's rules concerning the levy and garnishment of benefits, Social Security benefits may be seized by the Secretary of the Treasury for various purposes. These include collecting outstanding federal taxes, child support payments and alimony. Those whose wages were garnished for legal reasons may find their benefits subject to confiscation as well.

It is worth noting that although benefits can be seized for official reasons, they cannot be used to pay for interest or penalties, and there are limits to how much may be taken. For example, people who have their income garnished are generally exempt from paying a similar amount of money using their benefits. In addition to the Social Security benefit exemption, Ohio residents whose properties are about to be taken may be able to take advantages of exemptions for clothing, furniture and some personal belongings.

This information should not be misconstrued as direct legal advice. Various bankruptcy exemptions are codified in state and federal laws, but their application may not be consistent; creditors might attempt to seize properties they don't actually have a right to, and regional courts could fail to observe federal guidelines properly. Those who feel that filing is their best option often begin by educating themselves about the legal steps they need to take to secure their rights during the process.

Source: Social Security Administration, "SSR 79-4: SECTIONS 207, 452(b), 459 and 462(f) (42 U.S.C. 407, 652(b), 659 and 662(f)) LEVY AND GARNISHMENT OF BENEFITS", November 09, 2014

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