How they get your bank account?

[maxwell18]

What has to happen for the creditors to get your bank account? Can you notifly your bank before hand by letter all your income is exempt and do they have to follow your instructions?
Thanks

[tigergem]

You are supposed to get served with notice of a default judgment before the levy occurs, but a lot of times, "somehow" this doesn't happen. If you know a default judgment has been entered against you, you can take steps to vacate the judgment.

If you know the identity of your creditor that is/has/will attempt levy, you can write them a letter, something like this...(change it to meet your particular circumstances):

I am currently disabled and on Title II Social Security Disability.
This letter serves as formal notice of such and that Section 207 of
the Social Security Act (42 U.S.C. 407) protects Social Security
benefits from assignment, levy, or garnishment. It further protects my
Title II Social Security benefits from creditors, unless my debts meet
certain exceptions, such as child support or owed federal tax.

I would like to remind you that your claim does not satisfy those
exceptions and further attempts to collect through assignment, levy,
or garnishment of my Title II benefits is a direct violation of
Section 207 of the Social Security Act (42 U.S.C. 407). If you have
any questions, please direct them to me at ______________

Sincerely,

I do not know whether it is helpful or not... although I suppose it can't hurt... to let the bank know up front with a similar letter. Somehow I doubt that relieves them of the legal obligation to honor a levy if they receive one. Probably not, but maybe somebody else knows better. Your best course of action is probably to defend all judgments that come your way, timely and correctly.

[frogger]

I am currently disabled and on Title II Social Security Disability.
This letter serves as formal notice of such and that Section 207 of
the Social Security Act (42 U.S.C. 407) protects Social Security
benefits from assignment, levy, or garnishment. It further protects my
Title II Social Security benefits from creditors, unless my debts meet
certain exceptions, such as child support or owed federal tax.

I would like to remind you that your claim does not satisfy those
exceptions and further attempts to collect through assignment, levy,
or garnishment of my Title II benefits is a direct violation of
Section 207 of the Social Security Act (42 U.S.C. 407). If you have
any questions, please direct them to me at ______________

Sincerely,

That would be a good try, but it doesn't fly. So many debtors are pathological liars on all subject matters, so collection agencies pretty don't believe much of anything that is said by debtors.

Once the ca gets a judgment and goes after an account, whatever you say really won't matter. The levy will get served at the bank and your account will get frozen. It is going to be up to you to prove that any or all of those funds are exempt.

[tigergem]

That would be a good try, but it doesn't fly. So many debtors are pathological liars on all subject matters, so collection agencies pretty don't believe much of anything that is said by debtors.

Once the ca gets a judgment and goes after an account, whatever you say really won't matter. The levy will get served at the bank and your account will get frozen. It is going to be up to you to prove that any or all of those funds are exempt.

Yeah that is why I mentioned vacating the judgment. If I thought I was in danger of a levy, though, I would seriously call Social Security and have them issue me a pay card instead of direct depositing to a bank.

[junker]

here is a sample letter i received from California legal aid, to send to your bank.........

i just received a form letter from Legal aid in California..showing how to advise your bank ..IF..the funds in the bank are truly exempt..it says....

use this letter if the only income directly deoposited into your account comes from the social security administration or from some other types of public benefits(in which case adjust the wording accordingly).if other funds go into the account, its balance is protected only up to $2,700(4050 if the account belongs to two beneficiaries).
your name
your addres
city,state,zip
date-----
xyz bank
adddress

re account no........
I we am/are the holders/s of a checking/savings account at your bank.All of the funds/Funds(__choose which is correct depending on whether there are other funds deposited into the account as well) in that account are deposited directly by the Social Security Administration.(or other exempt source)
This is to notify you that should you receive any form of legal process by a third party asking to levy on my/our account, I/we/am/are entitled to an exemption without making claim, under provisions of federal law and California Code of Civil Procedure, section 704.080, in the amount specified in the statute. Your attention is further directed to Murphy vs. Wells Fargo Bank, San Francisco Superior Court case NO 978007, final judment December 9,1997, and also Cooper vs. Bank of America Nt. & s.a. Los Angeles Superior court, no BC 129502, in which the defendant banks agreed not to place a freeze or hold of any kind on a Social Security direct deposit account or assess a fee when the bank is served any form of notice of levy.
This is to advise you further that I/we rely on the current availability of the funds deposited in the account to furnish me/us with basic necessaries. Failure on your part to honor the exemption in violation of the statute for any period of time could result in serious consequences to me/us.
Sincerely,
your name 2nd signature, if applicable



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[WhatMoney]

While I suggest you send a letter to a California bank as suggested above, the reality is that the bank is most likely to ignore your letter and the CA law as clearly stated in California Code of Civil Procedure, section 704.080.

This is the proper procedure when a CA bank is presented with a bank levy from the sheriff:

1- The CA bank determines your direct deposit account with no mixed deposits has exempt funds based on the 704.800 law.

2- The bank refuses to freeze and turn the exempt funds over to the sheriff. They do this by responding with a memorandum of garnishee stating the 704.800 law and why it applies to the depositor debtor's account.

3- The depositor debtor does not have to file an exemption claim with the court unless the creditor collector challenges the memorandum of garnishee, and requests a court hearing.

From the Napa county instructions for bank levies:

Method of Levy
Garnishment is the method of levy in which the Sheriff serves a copy of the writ, notice of levy and memorandum of garnishee on the financial institution. The bank is required to remit funds to the Sheriff or explain in the memorandum of garnishee any reason for not remitting funds.

The Memorandum of Garnishee (CCP 488.610 701.030) has this question (among others):

MEMORANDUM OF GARNISHEE
(Attachment—Enforcement of Judgment)
NOTICE TO PERSON SERVED WITH WRIT AND NOTICE OF LEVY OR NOTICE OF ATTACHMENT: This memorandum must be completed and mailed or delivered to the levying officer within 10 days after service on you of the writ and notice of levy or attachment unless you have fully complied with the levy. Failure to complete and return this memorandum may render you liable for the costs and attorney fees incurred in obtaining the required information.
LEVYING OFFICER FILE NO.:
COURT CASE NO.:
...
— RETURN ALL COPIES OF THIS MEMORANDUM TO THE LEVYING OFFICER —
...
1. If you will not deliver to the levying officer any property levied upon, describe the property and the reason for not delivering it:

...

OK That's the law and correct procedure. But what is the REALITY?
Sadly the banks will NOT bother to file the memorandum. They will instead simply turn over all your exempt SS funds to the sheriff and leave it up to the hapless depositor/debtor to file timely exemption papers with the court and creditor's attorney - just like banks will do in all other states (except Delaware).

Why do the CA banks ignore the State Law statues? Because they can - there is no penalty for not following the law. It make little sense to start a civil suit against the bank for violating 704.080, since the judge has no reason to fine the bank a penny. A law with no teeth, depending on the decency and concern of banks for their depositors, is a joke of a law.

Call up any CA bank and try to find one that will agree in writing to obey CCCP 704.080. Most will first deny there is such a requirement - and then claim they only follow procedure as defined in your contract terms of service. A minimum fine of $10,000 per violation plus all court and legal costs might get the banks to notice and obey the law. But this isn't Disneyland, so it will never happen.

[jacko]

Why not be proactive and move your excess funds out in to a Wal Mart Visa debit account and or open a Pay Pal account linked to checking. After 60 days open, you can get a Pay Pal MasterCard debit card.

What has to happen for the creditors to get your bank account? Can you notifly your bank before hand by letter all your income is exempt and do they have to follow your instructions?
Thanks

[anykey]

yes- but with no bank account- how do you get the money INTO the paypal debit card?

[tigergem]

Can you link PayPal with a debit card and pull money that way? Not sure! Maybe?

[jacko]

I am not saying not to have a checking account. I withdraw and transfer my excess to my pay pal account after I bill pay for utilities and car insurance. Just don't want to wake up one day and see my funds gone knowing that I could of done something about it.

yes- but with no bank account- how do you get the money INTO the paypal debit card?

[anykey]

the trouble is they seized my checking and savings.

[ryan]

yes- but with no bank account- how do you get the money INTO the paypal debit card?

I have a Paypal debit card...have been a Paypal member for like 10 years.

You get the money into your Paypal acct (where you can then spend it with the PP debit card) by having a relative or friend transfer it from their acct into your Paypal acct.

[tigergem]

I have a Paypal debit card...have been a Paypal member for like 10 years.

You get the money into your Paypal acct (where you can then spend it with the PP debit card) by having a relative or friend transfer it from their acct into your Paypal acct.

This just sounds like such a major bad idea. I have read too many horror stories about PayPal run amok and freezing or overdrawing linked bank accounts. And since they are a NON-bank, they are not bound by FDIC guidelines. Scary.

[tigergem]

the trouble is they seized my checking and savings.

Then you need to get a debit paycard or cash your check at the bank it is drawn on, or Wal Mart I guess will cash your checks.

[flyinbroke]

My company went to a pay card, which I hear is supposed to be even cheaper than direct deposit for them. I have not changed over yet, but I have mine ready to roll. All others are exempt, but could just get them all on the card (I think it has a routing number as well, which means it can be done). I am only approaching 90 days on my latest accounts though so not in the worrying stage yet.

Have to wait on BK so my tax increase kicks in.