Published On: September 1, 2014

In 2013 approximately 156,000 older Americans found their Social Security checks garnished for delinquent student loans

The other day a caller said “I used a document preparer or bankruptcy petition preparer. Certainly they have obligations to keep my social security number confidential?” Unfortunately I had to say “Oh how wrong you are.”

According to Joshua Cohen about 156,000 older Americans had their Social Security checks docked last year for delinquent student loans, according to an analysis of government data by CNNMoney.  Those numbers tripled from 47,500 in 2006.While banks and private creditors can’t garnish seniors’ Social Security payments, the government can dock the checks for repayment on certain types of debt, including federal student loans, according to

Even after entering bankruptcy, consumers can’t always discharge their student loans, adding to the problem.

Fifteen percent of a social security check can be garnished by the government to pay back debts.

This garnishment happens without any notice to the senior who probably depends on Social Security to pay for basic necessities.

Senator Elizabeth Warren tried to address that problem by proposing a bill that would have allowed borrowers to refinance at lower rates.  Unfortunately it was killed by the Senate earlier this year.

How much will the senior loose?  Fifteen percent of a social security check can be garnished by the government to pay back debts. That means a typical indebted senior may find $180 shaved off his $1200 monthly benefit.  In most situations this garnishment happens without the need for the lender to file a lawsuit.  Therefore, there is little to no notice to the senior that their income will be reduced by 15% until the debt is paid in full.   Of course, that debt includes interest which may be locked at over 7%.

CLICK TO OUR WEBSITEWhen will Congress realize that something must be done about student loans.  There are two facets rarely discussed about this problem:

  1. Many students see student loans as “free money”.  “My loan just came in, let’s go shopping.”  That shopping is not for food or to pay rent or car payment.  Instead, it is shopping for designer jeans and purses, or an expensive vehicle.
  2. Schools must be responsible for their process in distributing student loans.  The problem is that the more students they can convince to take out loans, the more money the school makes.  There is financial disincentive to curb how and to whom students loans are awarded.

We all must encourage students to use their common sense when accepting any money they must pay back.

When Your Social Security Benefits are Taken by Pay Back Money to the Federal Government – article on National Consumer Law Center

By |Published On: September 1st, 2014|Last Updated: June 27th, 2022|

Share this article

About the Author: Diane Drain

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Google Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Yelp Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Avvo Reviews
Avvo - Rate your Lawyer. Get Free Legal Advice.
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Alignable Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Better Business Bureau

“You folks are the BEST OF THE BEST in Arizona.” M.H.

You and Jay are the best attorneys I have ever had or needed and thank God for the Honorable Robert Gottsfield in recommending you folks – I would have never made it through the entire process without you and Jay and God Bless you both always and stay in touch as well. You folks are the BEST OF THE BEST in Arizona.

“My only regret is that I didn’t find Diane sooner.” K.H.

I can’t say enough good things about Diane. The way she handled my not typical circumstances was amazing. I was very nervous to start the bankruptcy process but Diane just has a very comforting way of explaining the whole process. My only regret is that I didn’t find Diane sooner. If you find yourself in a financial situation that you can’t correct on your own, please Call Diane Drain as soon as possible.

“Filing for bankruptcy can be a stressful life event” R.A.

Filing for bankruptcy can be a stressful life event, and selecting the right attorney can add to this stress. Diane and Jay were a pleasure to work with, and it is obvious that they are passionate about helping people get their life back on track. I would highly recommend them if you need a bankruptcy attorney.

Related Posts

  • Published On: March 20, 2023

    “You were very nice and caring. ” R.G. I cannot thank you enough Diane for taking the time to speak with me. Your website has so much information and very helpful. You [...]

  • PEOPLE MAY WANT TO FILE A TAX RETURN – EVEN IF THEY ARE NOT REQUIRED TO DO SO Posting from the IRS IRS Tax Tip 2023-27, March 2, 2023 [...]

  • New Consumer Law Rights Taking Effect in 2023. This NCLC article lists federal and state consumer law rights scheduled to go into effect or expire, during the period from November 17, 2022, through December 31, 2023. Other consumer law changes will be enacted later in 2023 and will go into effect in 2023; this article lists changes whose effective dates have already been scheduled.

  • Published On: January 24, 2023

    “ROCKSTARS Diane and Jay!!! I am so happy ” P.C. ROCKSTARS Diane and Jay!!! I am so happy to work with you again. Within a few months, you got me the BEST [...]

My intention is to put you back in control of your life
Start with $0 down*. We provide affordable payment plans.