Can Uncle Sam Dip Into Your Social Security Due to an SBA Loan Default?

“Well, client, I hate to be the bearer of bad news, but yes – the SBA, together with the Department of Treasury have the power to garnish your Social Security benefits. But allow me some time to reassure you – there are paths you can walk down that can halt that garnishment. Have a sit down with me here at Lawscape and let’s discuss it further.

Breaking Down the SBA Social Security Garnish Game

See, when you enter into an SBA loan as a personal guarantor and unfortunately default, the top brass in the Department of Treasury might instigate what they like to call an “offset”. This isn’t a dance move, friend, but a way of saying they are going to take a chunk out of your monthly Social Security handout. And if you’ve tangled your spouse in this as a fellow guarantor – voila! They’ll be hit with the same garnishment tune.

How Deep Can The SBA Reach Into My Social Security Pockets?

This might sound alarming, but the SBA can snag up to 15% of your Social Security benefits. So, if Uncle Sam’s sending you $1,000 a month you might find yourself $150 poorer. However, you should note that there is an exemption for your benefit payments totaling up to $9,000 per year. In other words – $750 per month of your benefits are untouchable. It was the Big Boys and Girls in Congress who threw down the 15% limitation after the Debt Collection Improvement Act got the nod. Concerns were raised that ordinary folks like you may be relying on those Social Security payments for a hefty chunk of your bread and butter.

SO, How Much Can Be Taken Out?

The answer isn’t as straightforward as you might like, and it depends on the the lower of these three:

• The extent of your SBA debt
• 15% of your monthly covered benefits
• The amount by which your monthly benefit happens to exceed the $750 protection mark.

I’m Struggling. What Can I Do?

The torchbearers in Congress and the Department of Treasury included the offset limits for this very reason. While I understand the $100 snip as in the example above can cause a financial squeeze, the government hasn’t rolled out any way to contest the garnishment based on hardship.

Alright, I get it. But Can I Put The Brakes On This Social Security Garnishment?

You bet! There are a few cards you can play to stop the Social Security garnishment. One involves the tricky maneuver of recalling the debt from the Department of Treasury. Others might involve a legal shuffle to make an offer in compromise to buddy-up with the SBA and settle this thing. You could even appeal to the SBA Office of Hearings and Appeals if you believe you don’t owe this debt. If all else fails, you could take this to your Federal District Court. As a cautionary note, this path may require some heavy paperwork lifting and before you get that court date.

Reach Out For Experienced Legal Help

In all the noise, remember this – you don’t have to go through this alone. The whole crew here at Lawscape know their way around Social Security garnishments. I urge you to contact us today to set up a free initial consultation.

Why Choose Lawscape?

Want reasons? We could take you on a tour of the millions of dollars in SBA debts we’ve managed to resolve through compromise offers and negotiated repayment agreements. We’ve done this without our clients having to declare bankruptcy or give up their homes. And this isn’t just an SBA rodeo – we’ve gone up against Treasury debts via AWG hearings, Treasury Offset Program resolution and a wagon-full of other strategies. As members in good standing under the Agency Practice Act, we’re authorized to represent federal debtors nationwide against the SBA, the SBA Office of Hearings and Appeals, and yes – even the Treasury boys at the Bureau of Fiscal Service.”