Creditors Garnishing Protected Funds

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The problem is that you have a set of state and federal laws that are conflicting, Feddis said.

"The banks are caught between a rock and hard place," she said. "They have a court order that says they have to take this money."

A financial institution can take protected government benefits only under the following five conditions, according to the Social Security Administration:

· To collect child support and/or alimony obligations.

· To collect unpaid federal taxes as the result of an IRS levy.

· If the government beneficiaries elect to have a percentage of their benefits withheld and paid to the IRS to satisfy their federal income tax liability for the current year.

· To pay a federal agency a non-tax debt the beneficiary owes to that agency.

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