Welfare payments are usually exempt from creditor claims; but again, the
state laws on this are not uniform. Some states partially protect welfare
payments, others provide no protection. Public assistance programs (Aid
to Families with Dependent Children or AFDC) are protected in some states.
Welfare payments lose their protection once they’re received and
commingled with non-welfare funds. Public assistance payments –
such as aid to the blind and aid to the elderly and disabled – are
generally protected by state law. The proceeds from the sale or financing
of exempt assets that are used to acquire non-exempt assets also lose
Social Security and disability income payments aren’t lawsuit-proof.
Social Security is not considered a pension under the Employee Retirement
Income Security Act (ERISA) and therefore is not federally protected.
A creditor’s right to garnish Social Security checks depends entirely
upon state law. Bankruptcy or encumbering these monies due to you are
the two best solutions.