Past-due credit card debt, delinquent personal loans or medical bills are no longer a worry if a person is collecting Social Security benefits. However, if money is owed to the U.S. government in the form of child support, alimony or income taxes, benefits may be in jeopardy of garnishment. In Wyoming and other states, creditors can still take legal action against other assets to recoup debts owed to them.
Depending on the nature of the debt, the U.S. government can garnish as much as 15 percent of SSI benefits to repay it. By law, they are required to leave an individual $750 per month unless it involves federal taxes. If a person is delinquent on federal taxes, the government can take all SSI benefits to satisfy an income tax debt.
Many rely on SSI benefits as their primary source of income, so it is best to stay current on taxes, student loans, alimony and child support payments. For those who cannot manage payments, it pays to be proactive and work out a payment plan. The IRS and other agencies give advanced warning before garnishing benefits and will allow outstanding debt to be paid in installments over time.
Some may move into retirement with child support and alimony payments, and it can be easy to fall behind on financial obligations. Residents of Wyoming who find they cannot manage payments may benefit from consulting an attorney. A lawyer can determine the best approach for his or her client to avoid repercussions that may damage a person’s finances permanently.