Benefits from the federal government (all forms of Social Security benefits; Supplemental Security Income benefits; Veterans benefits; Federal Railroad retirement, Civil Service Retirement System benefits; and Federal Employee Retirement System benefits) extend automatic protection to the bank account where they are deposited.

The most important think to know about garnishments or levies of bank accounts is this - Unless a creditor or judgment has a judgment against you, they cannot levy the funds in your bank account.

This means the creditor or debt collector must first sue you. They must serve you with a summons and complaint. They must follow all of the steps required by law. This process takes time, and a creditor cannot attempt to take money before the process is complete.

Even if a judgment has been entered against you, though, you still have protection because the bank account into which Social Security is deposited has federal protection. Federal banking regulations automatically protect twice the monthly Social Security amount, no matter where the rest of the money came from. For example, if you receive $1000 in Social Security each month, then up to $2000 in your account is automatically protected even if some of the money in the account is from a source other than Social Security. The banks are aware if Social Security is deposited into an account, and they know the account is protected up to twice the amount of the Social Security deposit.

However, other bank accounts are not automatically protected. If a senior transfers funds from a protected account into another account, those funds might be garnished even if they are from exempt sources such as a Social Security, pension, disability, or exempt wages. If this happens, the senior will need to file a “claim of exemption” with the court explaining that the monies in that account were from exempt sources. The senior will need to provide written proof to a judge at an exempting hearing. There are deadlines, so seniors will need to file the claim of exemption in a timely manner. In the rare instance a senior’s bank account is held up pending a hearing on a claim of exemption, HELPS will contact the other attorney with the proof of protected funds in the account. We are often able to get the matter resolved without a hearing.

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