Q1: Can social security be garnished at bank level
A1: Yes and no. Technically direct deposited social security payments are exempt from garnishment. However, if the funds have not been direct deposited, they can possibly be garnished. If that is the case, you will have to go through the process of claiming that the funds are exempt. SEE BELOW:
When Social Security Funds Are Protected
Judgment creditors can garnish or levy funds in your bank account in order to collect on their judgments. (Learn more about frozen bank accounts.) But if those funds came from social security, the judgment creditor is limited in what it can do.
Under the law, social security funds are exempt, or protected, from garnishment and other actions taken by debt collectors. However, if your Social Security funds are not direct deposited into your bank account, or if you transfer the funds into another account after they are received, the protection is not automatic. A creditor can still have your account frozen by serving the bank with a garnishment or attachment and, if you don't respond to claim your exemptions, the funds can still be paid over to the creditor. Even if you do assert your exemptions, the funds will remain frozen and not accessible to you until the matter goes before judge for a ruling on the claims.
New Protections for Direct Deposit of Social Security Benefits
Under the new federal regulations, if a bank receives a garnishment order from a judgment creditor, it cannot freeze money that came from social security benefits (or benefits from certain other government sources) if the government deposited the benefits directly into your account within two months prior to the garnishment order. This shifts the burden to your bank to ensure that you have access to two months worth of social security benefits. The only exceptions are for garnishments or attachments for past due child support and federal taxes.
The Bank's Duty to Review Your Account
Here’s how it works. When the bank receives a garnishment or attachment order, the bank has two business days to conduct a review. It must identify your accounts and then determine if the garnishment order is to collect child support or federal taxes. If so, the bank may freeze your funds, even if they come from social security.
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