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In a perfect world, Social Security funds in your bank account should be immune to garnishment for any unpaid debts. Federal law says so. But in the real world, it happens. A lot.
The National Consumer Law Center estimates that about one million receipients of federal benefits have their benefits frozen by banks each year. When this occurs, seniors have to spend time and money - both of which may be in very short supply - to try to regain access to those funds in their account. This can result in a very desperate situation for those depending on those benefits.
To address the problem, the US Treasury Department has just instituted a new rule that will provide seniors a measure of protection in this situation. As of May 1, when banks receive a garnishment order, they cannot just freeze a depositor's entire account. They must research whether Social Security benefits have been automatically deposited into the account. If so, the bank is required to leave untouched and protected the last two months of Social Security deposits. This world of ours just got a little less imperfect...
Attorney Joseph S. Karp is a Florida Bar Certified and Nationally Certified Elder Law Attorney focusing on Elder Law, Probate, Estate Planning, Asset Protection, Special Needs Planning and Estate Litigation. He is AV rated by Martindale Hubbell. Mr. Karp is the founder of The Karp Law Firm, a South Florida law firm with offices in Palm Beach Gardens, Boynton Beach and St. Lucie, Florida. Mr. Karp was named a 2011 SuperLawyer by SuperLawyer Magazine and a member of the 2011 Florida Legal Elite by Florida Trend Magazine. He is admitted to practice law in New York as well as Florida. Visit Mr. Karp's Florida Elder Law and Estate Planning website.
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