Good job NY!

[keepmine]

[ssdsco]

Thanks for sharing !!

[JRScott]

That is nice

[magyar123]

California has a similar law - $2300 of amounts attributed to SS and $1600 regardless of the source. This became effective Jan. 1 of this year.

[sisterfunkhaus]

Yes!!

[WhatMoney]

California has a similar law - $2300 of amounts attributed to SS and $1600 regardless of the source. This became effective Jan. 1 of this year.

Source please?

California CCP 704.080 has been in effect since 2004 and exempts from legal claims the first $2700 of any bank account that has direct deposited Social Security benefits. It also exempts the first $1350 of other State or Federal benefits. And one can have co-mingled funds in this account as long at the SSA deposits can be identified.

http://www.courtinfo.ca.gov/forms/do...exemptions.pdf

I have not heard of any new laws that have superceded CCP 704.080 in California, so would like to know your source.

The practical problem with all these laws is that the bank is not penalized for violating them. So in many cases the bank will honor a levy irregardless of the exempt funds in them, and let the account customer sort it out in court - which is the same as it is in all states now.

Here's a challenge - get a letter from your local bank manager or officer in NY or CA or Conn (which also has this law) that agrees they will prevent a levy of your bank account as required by these laws. They will never agree to it. If you don't like it, you can always sue the bank (good luck).

Until there is Federal Law that makes it a crime, with mandatory fines for banks that violate the laws - the banks will keep freezing exempt funds. I would like to see a minimum $10,000 fine for each incident payable to the State, and another $5,000 penalty paid to the account holder. That is the only way to force the banks to obey the law. As it is the banks make too much money in legal fees and overdraft fees on levied accounts to change their greedy immoral ways.

[keepmine]

You have to take some individual initiative and take advantage of the legal protection.
Show up in court with proof of the source of funds. Once it's brought to the judges attention and the attention of the judgment creditor, nobody will issue a garnishment order. At that point, you do have recourse against the judgment creditor should they make a move on exempt funds.

[lrprn]

I poached this from a BK blog.

Here's the link to the original blog posting at Bankruptcy Law Network - http://www.************************/...makes-changes/

[BigJohn]

People may not realize that people on Social Security receive only 12 checks a year. If 1 check gets seized, that is over 8% of what a person gets for the year and the person has to wait 1 more month before any more money to come in. Terrible situation to be in.

[WhatMoney]

You have to take some individual initiative and take advantage of the legal protection.
Show up in court with proof of the source of funds. Once it's brought to the judges attention and the attention of the judgment creditor, nobody will issue a garnishment order. At that point, you do have recourse against the judgment creditor should they make a move on exempt funds.

For many Seniors over 65 this is naive and useless advice. How is an 85 year old widow in a wheelchair expected to "show up in court"? First off, even if a senior citizen realized what a summons is, how are they going to afford to file an answer to a lawsuit that they would lose anyway? With court fees of $200 plus attorney fees they simply could not afford to defend against a judgment, unless they were so wealthy that they wouldn't be in debt in the first place.

Some Seniors may even know that their social security deposit is exempt and having no other assets, would just let a lawsuit go to default. This is in fact what 99% will do. Why defend a losing case and risk further losses if you are already judgment proof?

After the default judgment is in, the creditor does not need to contact the Senior and ask them about their bank account. If they know where the account is (and that's easy if you are a collector with resources) they can simply request the garnishment from the county law clerk and have the sheriff serve levy to the bank, which will freeze all accounts with their social security number attached. Where is the chance for an unsophisticated Senior citizen to tell the judge anything before the levy is already served? There is none.

The only process in most states is to get a judge to release the bank levy after the funds are frozen. And to do this you must send in an exemption form to the court stating the legal reason for exemption and the legal proof of exempt funds. Most seniors would have a hard time even getting this far after the levy, without the help of an attorney, spending more money they don't have. And this process can takes several weeks if the creditor objects and the judge sets a hearing date.

Asking an aging Senior to be proactive in their legal affairs makes about as much sense as asking a five year old to stop by the operating room at the hospital to perform open heart surgery.

This was the entire intent of these State bills - to force the bank to be the first line of defense against illegal garnishment of direct deposited Social Security for Seniors. The bank can refuse to levy and freeze the funds, and be entirely protected by State law against any lawsuit with these new exemption laws. The banks' argument that it would be too hard to determine comingled funds in an account is taken care of with these new laws that allow comingled funds up to a certain amount. And since direct deposited social security accounts are clearly tagged - the banks cannot claim this is a barrier.

And despite all of this the banks are choosing to ignore the new laws because there are no penalties. And as far as a Senior having "recourse against anyone" - well to counter sue requires extra money and awareness of their legal rights, something many retirees don't have. See above.

[WhatMoney]

People may not realize that people on Social Security receive only 12 checks a year. If 1 check gets seized, that is over 8% of what a person gets for the year and the person has to wait 1 more month before any more money to come in. Terrible situation to be in.

And remember it can take the SSA 2-3 weeks to switch you over to a mailed paper check, assuming you can get through to them on the phone. If the court hearing to release exempt funds runs it's course of several weeks, this means a Senior with no disposable income could go for 2 months with no check. There is nothing to prevent the collector from hitting the account every month the check is deposited. Chase bank has done this in several publicized cases. At this point the Seniors are being evicted and going to the Food Banks to survive. Nice way to treat your grandparents (or parents)!

And for the inevitable reply that children should always take care of their parents - remember many parents are too proud to admit to their own family they are having financial problems, even if the family would help. Course if you have no family and are physically or mentally disabled, well I guess that person has no use in society and should just suffer and die. I hear that a lot from the young kids.

[ssdsco]

You have to take some individual initiative and take advantage of the legal protection.
Show up in court with proof of the source of funds. Once it's brought to the judges attention and the attention of the judgment creditor, nobody will issue a garnishment order. At that point, you do have recourse against the judgment creditor should they make a move on exempt funds.

It took some effort but I eventually got to someone with knowledge of what my NY

[WhatMoney]

It took some effort but I eventually got to someone with knowledge of what my NY

Your experience is exactly what I have found after interviewing dozens of California banks where the law has been in effect for 4 years. The law has no teeth so the banks give it the big finger. And of course the banks take their $150 fee out of the frozen account funds first even if the funds are eventually released. And if this $150 overdraws the account - well that's more NSF fees for the banks. The Banks do not give a damn about their customers' rights. Do not keep your exempt money in banks - and complain to your Congressmen. (Ha Ha - they don't care about the bank lobby money.)

As an example of the Banks actions I urge you to read this letter:
http://www.ots.treas.gov/docs/9/962991.pdf

Note paragraph #10. This is what is likely to happen in NY if anyone tries to enforce the new laws. It already happened in Virginia, where there was once a law protecting Senior exempt deposits - there no longer is thanks to the bank lobby.

What is even worse is that many of these bank levy's on exempt funds are based on Out Of Statue debt or debt discharged in bankruptcy. This makes no difference to the Junk Debt Collector. They know targeting aging Seniors is an easy way to make money even if the Senior has an affirmative defense to the judgment. And the banks are an important player in this criminal game of stealing exempt bank funds.