310.376.9865
If a person’s only source of income is social security, these benefits are legally protected from court issued garnishment or a court levy. Therefore, in theory, a retiree who owns no significant assets, would not have to file bankruptcy. However, creditors frequently obtain court judgments and freeze a retiree’s bank account which includes protected funds. This freezes the retiree’s account for weeks or months, the creditor hoping the retiree will be unable to figure out the procedures to unfreeze the account, and eventually the bank will turn over the protected funds to the creditor.
Feb 23, 2011 the US Treasury issued an “interim final rule” (that’s a government term, of course it doesn’t make sense), prohibits banks from denying access to protected funds. If an account contains protected funds (funds from Social Security Administration) banks are now required to protect two months of benefit payments from garnishments. Protection of more than 2 months of protected funds requires additional court filings by the retiree.
Therefore, if you are a retiree receiving social security benefits, and you receive notice from a creditor of intent to sue, get a lawyer to write a letter putting the creditor on notice that your only source of funds is social security.
DISCLAIMER: The content of this website is intended for informational purposes only. Nothing herein is intended to form the basis of an attorney-client relationship or constitute legal advice.
- Law Offices MJ Mann Bankruptcy Attorney
- 2706 Artesia Blvd, Suite BK
- Redondo Beach, CA 90278
- 310.376.9865
