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    #1

    Benefit Payment Offset

    I am filing BK and have a Cap one SBA business loan of about $20,000. I have waited too long to file ( shame and embarassment factor ) and now the gubmint is taking $300/ mo out of my ss disability check to pay this off. When I file can this payment be removed or am I screwed?

    TIA
    Tags: None
    #2
    Maybe I'm completely wrong - but I thought SS payments were exempt from any type of garnishment??????
    Moving ahead with my fresh start!
    Ch 7 Discharge: 12/14/2009
    TT Report of No Dist! 03/31/2010
    Case CLOSED!!!: 04/28/2010

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      #3
      Social Security benefits are protected from almost all creditors with the federal government being an exception. Did you file an affidavit with your bank asserting that the funds in that account are "entirely" SSA benefits? If they are co-mingled, that gets more complicated. SBA loans are government backed loans and may fall under the exception for garnishment.

      I might be inclined to tell the creditor that they are taking funds from an account which has "only" SSA benefits. This may not stop them since it's an SBA loan and may be an exception.

      Filing bankruptcy will stop the levy.
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog

      Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

      Comment

        #4
        Once the loan is returned to the SBA by the bank, the SBA has the ability to garnish government benefits like Social Security.

        Comment

          #5
          Anything government related is nearly impossible to make go away.
          The information provided is not, and should not be considered legal advice. All information provided is only informational and should be verified by a law practioner whenever possible. When confronted with legal issues contact an experienced attorney in your state who specializes in the area of law most directly called into question by your particular situation.

          Comment

            #6
            We had a $50,000 SBA loan and they settled for 5k. Of course at the time we had the money. Might be hard to settle making payments.
            Filed 11/17/11 Chapter 13, 341 meeting 12/21/11. Plan confirmed 1/19/12 - DISCHARGED 12/16/15

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