Social Security - How Lenders Trick You Out Of Your Disability Money
Therefore, disability checks can only be cashed by disability recipients (or authorized friends/family members if a proxy is needed).Social Security has also set up the system so that debtors cannot set a lien in place on disability money. For instance, if a disabled individual has not been making payments on a car, home, medical bills, etc, the lender cannot take a cent from their disability pay like they would with a salary or other collateral. Social Security disability recipients can be assured that their disability money is theirs and theirs alone, regardless of outstanding bills or debts. UNLESS...
Unless the creditor is a lender that supplies "payday loans," or loans in small amounts against vehicles or other collateral. For instance, a disabled individual needs $200, but his disability check won't come for another couple weeks. So he walks into his local Quick Loan or Payday Loan office. There is a box on the loan application asking for source of income, and he writes that he is on disability. Since the loan company cannot lien Social Security disability money, they have found a loophole in the system. They ask the disabled individual to sign on with a certain bank. This seems harmless, so the individual signs the paperwork and receives his $200.When the disability check comes, the check is deposited in this certain bank. But it is not an ordinary bank--it is a partner of sorts with the loan company, and the check is withheld from the disabled individual until the loan is paid. At this point, the disabled American, to whom the money is intended, has lost control of his money. Whatever is left over the disabled individual will receive back. The disability recipient may be surprised to see that his $200 loan actually cost him about $500 when you include interest. Some quick loan companies like this can charge up to 400% interest!If you are on Social Security disability and receive monthly checks, but sometimes have unexpected expenses and need money, DON'T DO A QUICK LOAN. It is that simple. Don't give your money to a large corporation when it is so desperately needed to buy groceries and pay rent. Instead, try these simple tricks to buy yourself some time until your disability check arrives:Explain the situation. If you need money for living expenses such as a mortgage or rent, try to set it up so you can pay later in the month if necessary, or even make two half payments instead of one big one. This may also work for car payments or other expenses.
Look to other sources for help. If you need money for food, there are plenty of state programs that should be able to help. If you show that you are on Social Security disability, they may not even question your precarious financial situation.Check with friends and family. If your situation is desperate, consider taking a small loan from someone you trust. A local food bank or church may be another option. Just try to stay away from credit, which may strain your finances even more from check to check and start you on a slippery slope to disaster.Hopefully these tips will help. Guard your disability money as best you can, and make sure it stays with you, where it was intended to be all along. Best of luck.
