Advice on protecting your pension and social security from garnishment - The Bills.com Blog
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Advice on protecting your pension and social security from garnishment
Question: I have received a summons for court in reference to my credit cards. I have been ill with 8 diseases and got behind so i went for a debt consolidation with a law firm. they have yet to make an offer to my creditors after four months. they state they need to compile more money. Meanwhile another creditor called me stating they also were sueing me,see me in court. If I have to appear in court, should I? I receive ss disability and a state pension; I was told they cannot garnishee either one. My question is; do I need to appear in court for a judgement? if my ss disability check goes into my savings but i always take it out to use of course, can they try to put a lien on my savings or checking accounts? I have told all my creditors that I have a debt consolidation law firm who is in touch with them but they are not happy to hear that.
I am in the state of New York could you please explain what is garnisheed and what is not in my state? I was told a state pension and ss disability was not garisheable is this true? Also if given a judgment, if I refuse to pay what will happen? I own nothing. I rent. I have a 10 yr old car. Will they take that?
Answer: Generally speaking, Government administered benefits, such as state pensions and social security, cannot be garnished by a judgment. However, if you deposit those benefits into a bank account and then co-mingle the funds with money from other, non-exempt sources, proving the exempt status of the funds may be quite difficult. My suggestion is to open a new bank account into which you would deposit all of your exempt funds, and maintain another account for any non-exempt funds you may receive (gifts from friends, income from work, etc.). You will then need to notify your bank that the funds being deposited into the exempt account should not be levied upon, and that the bank should refuse any levy orders it receives. The bank may or may not be able to guarantee that a levy will not be placed on your exempt funds, but taking these steps should offer
you at least some level of protection. If a creditor does place a levy on a bank account containing exempt funds, you will likely need to file a notice of exemption with the court, and attend a hearing to request that the funds be released back to you. If the court determines that the funds are exempt from attachment, it should release the money back to you.
You should keep in mind that a creditor generally cannot attempt to levy your accounts until it has obtained a judgment against you, so you should have some time to take the steps mentioned above to protect yourself. Since I am not an attorney licensed to practice law in the State of New York, I cannot provide you with legal advice, and you should understand that the information I am providing is general information based. I do not know enough about your situation to offer any specific advice. I encourage you to consult with an attorney licensed to practice law in your state to determine what action you should take in regard to the lawsuits that have been filed against you, and what steps you need to take to protect your assets from your creditors. Because you are disabled, you may be able to find an attorney willing to represent you at little or no cost to you. Visit the Legal Aid Society of New York?s website at http://www.legal-aid.org/en/home.aspx.
Appearing in court is better than simply not showing up, as appearing will at least provide you with an opportunity to express your side of the story. If the debts in question are justly owed, the court is likely to enter a judgment against you for the amount owed. From there, it is up to the
creditor to try to collect on its judgment, but if you have no non-exempt assets, then the creditor will probably be unable to collect on its judgment. Discuss the situation with your attorney to determine specifically what steps you need to take to best defend yourself against these lawsuits.
From what you describe in your question, it sounds like you have enrolled with a debt settlement or debt negotiation firm. These companies work with you to save up money , and then negotiate lump sum settlements with your creditors for less than the full amount of the debt. However, to effectively negotiate, these firms generally need a lump sum to offer to the creditor; since you have only been enrolled with the company for four months, you have probably not accumulated sufficient savings to effectively negotiate with your creditors. In this situation, you can either allow the court action to proceed, which will likely result in a judgment being issued against you, allowing your negotiations firm to settle with your creditors once you have sufficient funds to do so, or you can consider alternative options to resolve your debt, such as bankruptcy.
Given the fact that you have few assets and a fixed income, I think that bankruptcy may be a good option for you to resolve your debt problems. If you would like to read more about bankruptcy in general, I encourage you to visit the Bills.com bankruptcy information page available at http://www.bills.com/bankruptcy/.
I hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
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