Q. So, who really can attach and get my SS disability funds? I have no other income at all. What laws from federal and CA state apply? Thanks.
Generally, no one. Social Security benefits are exempt from levy, garnishment, etc. from all creditors. The exceptions are that the Secretary of the Treasury may make levies for the collection of delinquent Federal taxes and under certain circumstances delinquent child support payments, and likewise individuals may enforce a child support or alimony obligation. The Social Security website has the relevant law available HERE.
Q. FTB says they can take any funds if it has been on deposit for more that 2 months. (By the way, the bank received notice before the account had even existed for 2 months).
This simply isn't true. What the creditor may be referring to is the two month "look-back" period, but it is not what they are telling you. Your bank is required to protect up to two months of these benefits that are directly deposited into your account - rather than simply freeze the entire account to investigate the levy or garnishment order they receive, which is what they typically did before.
The bank's responsibility is to review the account to determine whether a benefit payment was deposited, then calculate and establish the protected amount for the account (which may be the entire account balance, if the entire amount is a social security benefit). Then, the bank must notify both parties of the amount protected.
This protected amount, calculated and established by the bank, is considered to be exempt from levy or garnishment under the law. In some cases, this automatic protection doesn't occur, such as when the federal benefits were deposited more than two months before the bank received the order. For any funds in an account in excess of the protected amount, the bank will proceed with its customary procedures for handling a garnishment order, including the freezing of funds.
However, this DOES NOT mean that the creditor will be given the money or can just take those funds because they are frozen. The money would still be exempt from levy or garnishment, but you may have to tell the court or your creditor that you think money in your bank account is exempt. And if they take the funds anyway, then you may have to contact a local attorney to take action against them to get that money back. And if you have to sue, you may be entitled to costs, expenses and attorney's fees as well. Some banks will supply you with the contact information for a local free attorney or legal aid service, but you can also find one near you at the Legal Services Corporation website HERE. Lastly, to avoid these kinds of problems, another way to protect federal benefits is to use the Direct Express card. Direct Express is a prepaid debit card on which federal payments, including Social Security, can be deposited. Benefits paid this way cannot be frozen or garnished unless they fit the above noted exceptions (e.g. child support or alimony).