FTC Consumer Alert
Federal Trade Commission Bureau of Consumer Protection Division of Consumer & Business Education
Creditors Seeking Federal Benefits in Your
Bank Account? Understanding Your Rights
If you receive federal benefits and have an unpaid debt, a creditor or the debt collector it hires
may get a court order to try to take money from your bank account to pay the debt. The court order
is called a garnishment. What’s important to know is that federal benefits ordinarily are exempt from
garnishment. That means you should be able to protect your federal funds from being taken by your
creditors, although you might have to go to court to do so.
What federal benefits are ordinarily exempt from garnishment?
The Federal Trade Commission (FTC), the nation’s consumer protection agency, has suggestions
on how to protect your federal benefits from garnishment. The federal benefits that are exempt from
•	 Social	Security	Benefits
•	 Supplemental	Security	Income	(SSI)	Benefits
•	 Veterans’	Benefits
•	 Civil	Service	and	Federal	Retirement	and	Disability	Benefits
•	 Military	Annuities	and	Survivors’	Benefits
•	 Student	Assistance
•	 Railroad	Retirement	Benefits
•	 Merchant	Seamen	Wages
•	 Longshoremen’s	and	Harbor	Workers’	Death	and	Disability	Benefits
•	 Foreign	Service	Retirement	and	Disability	Benefits
•	 Compensation	for	Injury,	Death,	or	Detention	of	Employees	of	U.S.	Contractors	Outside	the
•	 Federal	Emergency	Management	Agency	Federal	Disaster	Assistance.
However,	there	are	some	situations	where	these	funds	are	not	protected	and	may	be	garnished.
For example, some of these federal benefits may be used to pay delinquent federal taxes or student
loans.	Others,	such	as	Social	Security	benefits,	may	be	deducted	before	you	receive	them	to	pay	child
support or alimony.
The	law	varies	from	state	to	state	as	to	what	types	of	state	benefits	are	subject	to	and	exempt	from
garnishment. For more information, you should contact an attorney who practices in your state, your