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Connecticut Judgment

I am on Social Security, and have a credit card judgment I cannot repay. How much can the creditor levy from my account?

I am retired with Social Security income of $894 monthly. I have a credit card judgment of $1,398. I can't pay it. No money left! I tried, but the interest of repaying is so stiff. The credit on the unpaid balance is nothing, they take money. My question is: What percentage can levied be on my checking account & how much is exempted?

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Your question is common among debtors with Social Security income. First, some background information:

Levy Bank Accounts

A levy means the judgment-creditor has the right to take whatever money in a debtor's account and apply the funds to the balance of the judgment. The procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state's laws to find if a bank account can be levied. See the Bills.com resource State Consumer Protection Laws and Exemptions for an overview of each state's rules.

To get a levy, garnishment, or lien, a creditor must first get a judgment from a court of law. (See the Bills.com resource Collections Advice to learn more about this process.)

Pension Exemption

Generally speaking, pensions are exempt from garnishment or levy. The exceptions are child support and tax liens, and other relatively rare circumstances. See the Bills.com resource Can a creditor be allowed to do Social Security garnishment? to learn more about the protections the federal government has put in place for beneficiaries of Social Security benefits.

If your pension or Social Security benefits are commingled in an account with funds from other sources (such as gifts from friends or investment income), then the contents of the entire account can be levied. Therefore, it is imperative that people who are receiving a pension or Social Security benefits have those funds deposited in an account that only receives deposits from the Social Security Administration and/or the pension administrator. Insist that the bank or credit union annotate the account with the message that the source of the funds in that account are pension and Social Security benefits only, and cannot be garnished or levied.

Your Situation in Connecticut

In the Ask Bill Web form, you stated that you reside in Connecticut and earn less than $20,000 annually. This answer is based on that information and assumes your only income is from Social Security. You do not mention if you own your home or rent.

If you own your home, then the house would be exempt from a lien up to the value of $75,000 and your Social Security earnings would be exempt (Ct. Sec. 52-352a. Definitions for exempt property provisions). Your bank account can be levied. However, there are limits based on your status, and current limits appear to be $1,000. You must provide proof of your insolvency. You may be able to arrange a long-term payment scheduled order by the court (Ct. Sec. 52-355a. Judgment lien on personal property). As stated above, have your bank annotate that your income is from Social Security and is exempt.

Recommendation

Go immediately to your bank and have the account that receives Social Security income be annotated as exempt from levy. Contact the Connecticut Bar Association if you need legal services and cannot afford an attorney, and ask the Connecticut Bar for the contact information for the local group that provides legal services to people with low or no income. I suggest you speak to an attorney in your state to see what procedures to follow to file an exemption with the court.

I hope this information helps you Find. Learn & Save.

Best,

Bill

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