Creditors can seize the money in your bank accounts if they have received a judgmentagainst you.
Know Your Rights
The money in your bank account may be shielded from creditors, commonly referred to as “exempt;” however, if you do not know how to inform the Courts that your funds are exempt, the garnishment will most likely be successful for the creditors.
You must know your rights when it comes to protecting your money. The creditors will not go out of their way to educate you on Debtor’s Rights. Further they will not inform the Court that your funds should be off limits to a garnishment. The Court considers that to be your responsibility.
Respond to All Legal Pleadings
The Creditor will send legal pleadings to your bank and a copy to you. Once your bank receives the pleadings, it will freeze your account. It is not uncommon for you to receive the pleadings after your account is already frozen.
Your copy of the pleadings is very important. In order to assert your rights as a debtor, you must file the appropriate pleadings with the Court. You only have a very limited amount of time from the date you receive the notice to request a hearing and file the necessary pleadings to protect your seized funds.
Protected Funds
There are specific laws that have determined certain funds are exempt. If funds are “exempt” that means that there is a law prohibiting creditors from taking certain funds.
Here is a very basic list of funds that are completely protected:
- Social Security Benefits
- Veteran’s Benefits
- Railroad Retirement Benefits
- Black Lung Benefits
- Unemployment Benefits
- Welfare Benefits
- Student Loan or Grant Funds
Depending on which state you live in, there are other funds that have been determined to be exempt by law.
Do Not Co-Mingle Funds
In order to ensure these funds are protected, it is very important that you do not deposit any non-exempt funds into any account where you are holding exempt funds. For example, if you receive Social Security Benefits and they are directly deposited into your checking account and you also receive wages from employment, you should not deposit your wages into the same account.
For further assistance with your consumer law issue, schedule your free initial consultation with our firm.