Federal pensions and judgment/garnishment.

[ghk3rd]

I am retired CSRS and have massive credit card debt. My only income is my pension. Can it be taken as judgment or garnishment?
Can I stop the bank from freezing my account?
Should I change account or have paper check mailed to me ?
If mailed where or how does one cash a 6000 monthly check ???


DATA :
MORTGAGE 2792 (UPSIDE DOWN APPROX 60k).
CAR 642 (OWE 22,VALUE 18
CC-74K (NO PAY SINCE NOV. 2008)
TAXES 500
HEALTH AND LIFE INSURANCE 400
LIVING EXPENSES-1800.
MINUS-200 ON MEANS TEST .

Plan to file 7 at end of year .

[catleg]

This seems to cover it:

http://www.cpol.army.mil/library/benefits/docs/ri84-001.pdf

Garnishment of CSRS and FERS Benefits
Garnishment is a legal process under State law for enforcing existing legal obligations.
CSRS or FERS benefits can be garnished only for alimony, child support, or
in cases of child abuse. The garnishment must conform to all State law requirements
for garnishment actions involving private employers, and is subject to the
limitations in Title 5, Code of Federal Regulations, section 581.

[ghk3rd]

Judgments synonomous with garnishments ??

Several people have told me that once the pension is deposited it becomes ordinary income and is subject to normal court ordered judgments . Anyone have any info on judgments ??? Thanks.

[DeadManCrawling]

THat is possible, but far from certain.

Some states have held that it becomes ordinary income if it is comingled with any other funds, which can be avoided by having a separate account for only the pensin money, which is never used for any other purpose.

This is an intricate question and varies by district, so you really need to ask this question of an attorney who is intimately familiar with how the law is applied in your exact area.

[LuciluS]

I'm disabled and received Social Security Disability. It is direct deposited into our (mine and hubby) checking account. We live in AR.

Our BK Attorney told me it could NOT be garnished; however, he did state because of joint account, banks have no means and are not subject by Law, to determine such.

Luci

[ghk3rd]

How do you indentify account for pension funds only ?

THat is possible, but far from certain.

Some states have held that it becomes ordinary income if it is comingled with any other funds, which can be avoided by having a separate account for only the pensin money, which is never used for any other purpose.

This is an intricate question and varies by district, so you really need to ask this question of an attorney who is intimately familiar with how the law is applied in your exact area.

I am a widower so I am only person on account. My only deposit is my pension and my yearly income tax refund .
Should I keep separate accounts for income tax ???
How do banks verify that only pension is included in account ???
I would hate to have my account frozen ,especially since only deposit is non judgmental funds .
Any ideas anybody ? Thanks..

[GoingDown]

While it is technically unlawful for a judgment creditor to garnish exempt funds, it does happen sometimes. And then you have to go to court and prove to a judge that 100% of the money in that checking account was from an exempt source, and then the judge will order the money to be returned to you and you might be able to get the judge to order the judgment creditor to pay your court costs, legal fees, etc. But all this takes time and effort and money.

In theory, if you have informed the judgment creditor and their attorney in writing that all of your money is from an exempt source and that you are prepared to contest the matter in court, they are unlikely to try to garnish your checking account, because they will likely think it to be a waste of their time and resources.


Until someone actually files a lawsuit against you, you have nothing to worry about.

If someone files a lawsuit, I would start cashing paper checks and using cash, money orders, and pre-paid Visa cards to pay everything.


Another option is to have the money direct deposited to something like the Wal-Mart money card (a pre-paid Visa Debit Card), which would be very hard for creditors to find and attach. Remember, debt collectors only know what you tell them and what they can find on your credit report, etc. If you don't tell them about it, they probably won't be able to find it.

The other option is to just take your chances and withdraw as much money from your checking account as possible as soon as your money gets deposited each week. But I certainly wouldn't have tons of money just sitting in that account.

After someone files a lawsuit against you, the rule to go by is this... never leave more money in a checking account than you can stand to lose. Even if it's just a temporary loss.

[DeadManCrawling]

You really should ask an attorney these questions, because of the huge risk.

I have read cases where everything was close to your situation. The bank account was emptied, illegally. However, it took 2 years and many court proceedings to determine this and get the money returned. That occurrence could be deadly to most of us, so the existence of a law or exemption doesn't, in itself, protect you, if the creditor is willing to risk ending up in court.

[LuciluS]

It was my understanding a Judgement could be filed against someone and such would only receive a letter via Regular Class Mail. If I'm wrong please point me in the right direct. I live in a very small town and mail is sometimes delivered to my neighbor who lives behind me.

In the meantime, I am petrified of our checking account being depleted until we filed Chpt. 7 on 9/30/09. We quit pay all but one of our credit cards last Sept. All of are in the hands of Collection Agencies or JDBs.

Also, it could possibly take up to 6 weeks for a consultation with an Attorney. I know when my direct deposit for SSD is deposited into my local bank's checking account. Bank opens at 7 am & I'm there to withdraw my SSD amount. However, mine is less than $2,000 and could see where OP might have problems with $6,000.

I've researched those Wal-Mart pre-paid Credit Cards. One is backed by MetaBank and one is backed by GEMB. Personally, I don't feel comfortable using such.

Luci

[LuciluS]

Bigboy2U:

I read it in the Stickies:

http://www.bkforum.com/showthread.php?t=20104

date 7/16/08
by: FreshLikeADaisy
Registered User
B/F Guru

Join Date: Nov 2007
Location: Florida, successful pro se
Posts: 1,600 Yeah, I just looked it up in the Florida Rules of Civil Procedure (http://phonl.com/fl_law/rules/FRCP/frcp1080.htmSorry, in severe pain. Took me a tad while

Luci

[ghk3rd]

Account Now vs. Walmart Money...

Walmart is limited to 3000,Account Now accepts up to 10000 per mo. Anybody have any info about Account Now. Since Walmart is owned by gebank,one of my many creditors I am reluctant to use it .

[LuciluS]

Walmart is limited to 3000,Account Now accepts up to 10000 per mo. Anybody have any info about Account Now. Since Walmart is owned by gebank,one of my many creditors I am reluctant to use it .

'Google' accountnow dot com. They are part of Metabank. They'll be the first one to show up on google. There fees are high! Click on Prices and Fees.

Luci

[treehugger1]

I think accountnow and a few others use small regional banks as holding companies for funds. Technically, the pre-paid acrd is not a bank account, but it is tied to some bank. To you, it is simply a cash card. Many of the upper scale prepaid cards now have free bill-pay, waive certian fees for DD,e tc. Read the print on the applications for pre-paid cards and you will find the regional bank. GEM is not one of the banks.

[junker]

i use netspend pre paid debit cards, each one you can load to 5k, and they will let you have three... also if on ss, which i am starting this month, i am signing up for the ss debit card. which they note in their advertisement, cant be garnished.. but all that can be put on is social security funds...

[treehugger1]

Wow! It sounds as if Netspend is setting up help protect exempt funds. Good for them. How often does a bank take on such a responsibility? Or, does the new SS debit rules have a requirment against garnishment?