Bank account garnishment other than social security

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BarbOurYear

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Hello all. Embarrassed to admit my husband and I have judgements from credit cards. We're retired, so our income is from social security. Our bank has notified us that our social security is protected from garnishment, but what about any other cash we may deposit? For example, if our SS is $1,000 and we write $500 in bills, we then have $500 that's still protected. If we then deposit an additional $600 in cash, is it up for grabs? Thank you for your time.
 
Yes, the $600 is up for grabs.

Is there a reason you wouldn't pay off the credit card bills?
 
Well, the reason is that we owe about $50,000 and the offers they made, before the judgements, were just too much. We are looking at some crucial medical bills coming in the next few months. Our business went down the tubes when the economy crashed and we've basically lost everything. Sounds pathetic.
 
Is bankruptcy an option for you? It would free up resources so you can at least live a bit more normally perhaps?

Your social security is, as the bank said, protected. Regular creditors cannot get at it, either - but they too can file to levy any other assets if they're not exempt.

Seriously - have you considered bankruptcy?
 
We did check into BK but decided at our ages (63 & 65) we've downsized dramatically and are content to live frugally. We'd rather save the cost of a bk; couldn't get credit even if we did want it. Just want to be sure that if we have anything in checking from a source other than social security, it won't be snagged. Pathetic, but pretty happy ... especially with Obamacare and Medicare. lol
 
BarbOurYear said:
We did check into BK but decided at our ages (63 & 65) we've downsized dramatically and are content to live frugally. We'd rather save the cost of a bk; couldn't get credit even if we did want it. Just want to be sure that if we have anything in checking from a source other than social security, it won't be snagged. Pathetic, but pretty happy ... especially with Obamacare and Medicare. lol
Click to expand...


No, I do understand how this can happen. Sometimes things just literally do 'crash' financially. It's not always a case of making bad decisions. Don't feel bad.

You are effectively judgment proof when it comes to other bills, but still if you do have other income and you're depositing it into the same bank account, it can be snagged.

For what it's worth, if you're willing to put in the effort it's not impossible to do a bankruptcy without an attorney; I don't generally advise it but it IS possible and even the filing fees can be waived.

(As a hint, I'm not an attorney - I'm just a Mom and Grandma! - but I managed to successfully complete a Ch 7 myself including the discharging of federal income tax and removal of the lien!)
 
Thank you, Proserpina. You were very gentle.

One last question so im sure i get it: it's the source of income (social security), not the amt that protects our bank acct. If we use a portion of our ss and then deposit an amt equal to what we used, bringing the balance back up to the total ss amount, that cash deposit amt is subject to garnishment. (Wow, hope you're not an English teacher.) Is that correct?

Thank you again...for the advice and for your kindness.
 
That's correct - it's the source of income, not the amount. You're understanding it correctly :)

You're very welcome. I know that sometimes (especially if you have something like unexpected medical bills) life just throws you a curve-ball. We can't always be prepared for every possible outcome, and thankfully the law does allow us to start afresh.

Many people have been or are in a similar situation. You're not alone, and people do understand :)
 
I need to chime in here. One should never, ever, ever commingle funds with Social Security. SS is exempt, exempt, exempt (except from the IRS if you owe back taxes) however that exemption ends if the funds are commingled. Once commingled, tracing becomes a huge problem as you cannot tell which dollar came from SS and which came from some other source.

General rule: Open a new account where the ONLY funds deposited are from SS. Use the existing (old) account as you see fit for money coming from other sources. You can withdraw from the SS account as needed but never, ever add to it unless the money so added is SS money.

As to filing a bk, Proserpina is correct. . . you do not necessarily need an attny. You should, however, investigate filing bk by consulting with local bk attnys. Consultations are usually free and each time you meet with an attny you will learn something new. You may very well be judgment proof and, therefore, not need a bk, but filing one may give you some peace of mind.

Des.
 
About 15 or 20 years ago I needed to do a BK. I found an Attorney who took payments on the BK this made it affordable and since it was through an Attorney I was certain it was being done right. Just food for thought
 
Shrink, these days bk attorneys will take payments but they won't actually do much until their fees are paid - because if they file before they're paid in full, their fees must be listed as part of the bankruptcy.
 
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