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Maverick, Attorney
Category: Bankruptcy Law
Satisfied Customers: 6391
Experience:  20 years of professional experience
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My only income since 4/2012 is from my SSDI benefits. A bank

Customer Question

My only income since 4/2012 is from my SSDI benefits. A bank levy was placed against my bank account to collect the HOA debt. I understand SS 207 protects me from this happening. The bank (BAC) debited the funds from my account. I contacted the bank and their legal dept. that authorized the debit from my account will not speak or communicate with a customer under any circumstances. There only defense was that the original Social Security funds that were deposited into my checking account, were then transferred into my money market account, which was the account that was debited, which made the money market account exempt. I see nothing in the law that supports their reasoning, nor could they provide me with any documentation.
All of my SS monthly checks have been direct deposited into my checking account. A few months ago, I felt it was in my best interest to open up a MONEY MARKET account, with the idea of avoiding checking account fees, as well as obtaining a small amount of interest. There is a 100% clear paper trail that proves the funds in the MONEY MARKET account are from my SS income.
Section 207 provides protection for SS income, in no part of the law does it state that the money has to be kept in the same account in which the SS deposits were made. Is there anything that is not correct regarding this statement?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Maverick replied 1 year ago.

Welcome to Just Answer (“JA”)! My name is Maverick.

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Customer: replied 1 year ago.
Look forward to your response.
Expert:  Maverick replied 1 year ago.

ANSWER: While you are correct that the SS funds are exempt, State law governs to what extent the exemption prevails. For example, in NY the first $2,500 in an account that has had statutorily exempt payments deposited either electronically or by direct deposit in the last 45 days before a restraining notice was served on the bank is protected. If there is $2,500 or less in the account, the account cannot be restrained and the restraining notice is void. If there is more than $2,500 in the account, only the balance above $2,500 can be restrained. Usually the bank has to notify you of the garnishment and it is at that time you have to claim that all of those funds are from SS and thus exempt. If there is a still a dispute, then a hearing is held and the court decides what portion of the account is exempt. In your case it appears that you did not receive any notice and the bank released the funds without your having a chance to claim an exemption. You may have a negligence claim against the bank depending on your State's law.

Customer: replied 1 year ago.
Thank you, ***** ***** writing a letter to the court along with my documentation.
So I am clear on one point, there is nothing that would change the law due to the funds being moved from a CHECKING acct. to a MONEY MARKET acct., assuming I have clear and precise proof that all funds are from SS?
Expert:  Maverick replied 1 year ago.

No. I have never seen any law make that type of a distinction in this context. The problem typically is not what TYPE of account the SS funds are in; rather the problem is commingling those funds with non-SS funds and then one side tries to claim that they are all from SS and the other that they are not, either in part or whole.