Start My Answer
loading...

Can Private Disability Payments be Garnished?

George Simons | December 02, 2022

George Simons
Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Don't carry around that debt forever.

Summary: Are you being sued by a debt collector for an old debt? Worried they'll take your private disability payments? Find out if private disability payments can be garnished and what to do about it.

Federal laws protect different types of wages from garnishment. In most cases, disability payments are exempt from wage garnishment; however, different states have different regulations. Some states may allow a creditor to garnish private disability payments. Nevertheless, federal law protects part, if not all, of your private disability payments from garnishment.

First things first, you'll need to learn some basic facts about garnishment to understand the type of protected wages. Here's everything you need to know.

What is wage garnishment?

A wage garnishment is permission granted to a creditor to directly collect unpaid amounts of debt from the debtor's wages. When the creditor wins a case against the debtor, the court grants them a writ of garnishment. However, the law limits the amount creditors can collect and the type of wage subject to garnishment.

Protect your wages from garnishment with SoloSuit.

Wage garnishment exemptions

Wage garnishment exemptions allow the debtor to keep some money for their necessities despite the debt collection permission granted to a creditor. Different states list different types of exemptions, most of which include the following types of wages:

  • Social Security Income.
  • Child support.
  • Disability payments.
  • Alimony.
  • Retirement payments.

Depending on the different state laws, these wages may be partially or fully protected from garnishment.

Private disability insurance

Many businesses provide insurance for their employees against getting injured or disabled while at work via a third-party insurance company. Similarly, some individuals buy personal insurance to cover them in case of an injury, especially if their profession is high risk. This is called private disability insurance and is classified as a needs-based, high-priority wage type in the United States. As a result, in most cases, these kinds of payments are protected from wage garnishment.

However, there is an exception to private disability insurance garnishment. The court may allow a creditor to garnish these funds if the debts are a higher priority than the disability funds. For example, child support and government taxes can be collected from these funds.

Use SoloSuit to win your debt collection lawsuit.

State disability payments

On the other hand, disability payments paid by the state are generally protected from garnishment. The simple rule is that the state can't collect from the money it provides for its citizens for support. State disability payments are more protected than private ones. However, if the court deems a debt to be of a higher priority, such as child support, your state disability payments may be garnished.

Money in your bank accounts

A creditor can be allowed to collect money from your employer or your bank accounts. The money is collected from your bank account through levies, which is similar to garnishment. In this case, the bank diverts money from your account to the creditor as per the terms of the debt collection. If the bank is not aware of the source of funds or the money commingled with other funds in your account, money in the bank will be treated simply as cash in the debtor's account.

This means that if you deposit part or all of your disability payments to your bank account, the money loses its protection from garnishment and simply becomes cash. However, your disability payment remains protected if it is still unpaid by the insurer or is in the form of a check.

But that does not mean that you should not deposit your money in the bank in fear of garnishment. On the contrary, all you need to do is inform the bank of the source of funds to prevent them from imposing levies according to the law.

Keep your assets safe from debt collectors with SoloSuit.

How to prevent wage garnishment

Generally, the federal Consumer Credit Protection Act protects 25% of your disposable earnings from debt collectors. However, this amount may be too little for you to live on if your earnings are subject to garnishment.

You may have a chance to adjust the garnishable amount by filing an objection. However, your chances of changing the percentage of garnishable income depend on the state you are in and the type of debt being collected.

Before a garnishment notice is issued to your employer, you usually have a chance for a hearing or a written notice on the cause of action. After receiving this notice, you will have a few days to respond if you have any objections before the garnishment process begins. In most cases, it could take a couple of business days or up to 30 days.

You should indicate your genuine reasons for objection in your response and provide any evidence that supports your claim. If accepted, the garnishable amount may be reduced, or the garnishment order suspended altogether.

The best way to prevent your case from ending up in a garnishment order is by tactfully filing your Answer for a debt collection lawsuit. Solosuit can help you discover several legal ways to approach the debt lawsuit Answer and challenge the creditor in court effectively.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

Get Started

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Guides on how to resolve debt with every debt collector

Are you being sued by a debt collector? We’re making guides on how to resolve debt with each one.

Resolve your debt with your creditor

Some creditors, banks, and lenders have an internal collections department. If they come after you for a debt, Solosuit can still help you respond and resolve the debt. Here’s a list of guides on how to resolve debt with different creditors.

Settle your medical debt

Having a health challenge is stressful, but dealing medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Guides on arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Stop calls from debt collectors

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Federal debt collection laws can protect you

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Get debt relief in your state

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt collection laws in all 50 states

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt state guides

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote a guide on each state’s statutes. Check it out below.

Statute of Limitations on Debt Collection by State (Best Guide)

Check the status of your court case

Don’t have time to go to your local courthouse to check the status of your case? We’ve created a guide on how to check the status of your case in every state, complete with online search tools and court directories.

How to stop wage garnishment in your state

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in all 50 states.

Other wage garnishment resources

How to settle a debt in your state

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created a guide on how to settle your debt in all 50 states. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

How to settle with every debt collector

Not sure how to negotiate a debt settlement with a debt collector? We are creating guides to help you know how to start the settlement conversation and increase your chances of coming to an agreement with every debt collector.

Other debt settlement resources

Personal loan and debt relief reviews

We give a factual review of the following debt consolidation, debt settlement, and loan organizations and companies to help you make an informed decision before you take on a debt.

How to repair and improve your credit score

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt.

How to resolve student loan debt

Struggling with student debt? SoloSuit’s got you covered. Below are resources on handling student loan debt.

Civil law legal definitions

You can represent yourself in court. Save yourself the time and cost of finding an attorney, and use the following resources to understand legal definitions better and how they may apply to your case.

Get answers to these FAQs on debt collection

How-to debt guides

Learn more with these additional debt resources

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



Get Started


Contents