Updated regulations re garnishment of government benefit acciounts .

[ghk3rd]

As of May 1,2011 it will be against the law for a bank to freeze or withdraw money from an account that contains government benefits .Here is a link to the revised regulations

https://www.federalregister.gov/articles/2011/02/23/2011-3782/garnishment-of-accounts-containing-federal-benefit-payments

Free at last !!!!!!!!

[LadyInTheRed]

As of May 1,2011 it will be against the law for a bank to freeze or withdraw money from an account that contains government benefits

Not exactly. It limits the amount in the account that can be frozen. It exempts from freezing the lesser of the amount of government benefits directly deposited to the account within the last 60 days or the balance on the date of garnishment. My guess is that for most people receiving government benefits, that will mean the entire account. But, if the account contains savings above what was directed deposited within the last 60 days, those savings are still vulnerable to the garnishment.

The entire proposed rule can be read at: http://www.gpo.gov/fdsys/pkg/FR-2011.../2011-3782.pdf

ETA: This IS good news.

[WhatMoney]

The entire proposed rule can be read at: http://www.gpo.gov/fdsys/pkg/FR-2011.../2011-3782.pdf

ETA: This IS good news.

It certainly is. I've put this news in a Collections Forum Sticky as well. There is still the problem of where to put your savings in excess of 60 days of direct deposits. I expect many seniors with debt and judgments don't have to worry much about having that much savings. At an average SS check of $1,200/mo, that's a nest egg of $2,400 life savings protected in the bank. WoW!

There is also no protection from bank levy if you transfer your exempt funds to another account, like a savings account. Of course the usual exemption laws and court hearings will be needed to release frozen funds if you do not use direct deposit or transfer funds out of your protected account. A SS Treasury check deposited into your account is NOT protected either. Only ACH funds directly deposited apply to this new regulation.

Some states, like mine, protect up to $7,500 in exempt funds and have protection laws 1 1/2 years ahead of this Federal ruling, but for most with no State protection laws this is a much needed regulation.