If you have become disabled while working in Ohio, because of either injuries or an illness, you may qualify for Social Security disability insurance (SSDI) benefits. Unlike workers’ compensation benefits, if you have worked for the required time to be eligible for SSDI, it does not matter if your disabling condition was work related. Because benefits like SSDI are designed to help those who are unable to work and have no other source of income, they typically cannot be garnished by a debt collector.
The federal government can garnish these payments for child support, unpaid federal taxes, some student loans, but a bank cannot garnish SSDI for a private debt. A recent case demonstrates the price such “reckless disregard” can cause for a financial institution.
A women who had worked for a credit union, lost her job when she developed multiple sclerosis. Her husband had received a loan from the credit union earlier, which she cosigned, and when he defaulted, they sued and obtained a judgment against him.
During this time, she had applied and been approved SSDI benefits. Her first benefit payment was made to the credit union, and when she insisted that they return it to the SSA, so it could be deposited in a different bank, they refused.
She had to sue to them for the $13,000 they held and after five-years of litigation, she won the case and the court ordered the credit union to return the payment. In addition, the judge ordered triple damages, punitive damages and payment of her attorney’s fees.
All told, their attempt to claim her SSDI payment cost the credit union more than $200,000. They promise to appeal the ruling.
Source: Myrecordjournal.com, “Credit union loses case over disability benefits,” Andrew Ragali, August 21, 2013