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New York Pension & Social Security Garnishment Protection Team
UpdatedApr 15, 2024

Could you please explain what may be garnished and what's exempt for New York residents?

I 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 suing me, see me in court. If I have to appear in court, should I? I receive Social Security 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 judgment? 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 garnishable 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 year-old car. Will they take that?

Generally speaking, government-administered benefits, such as state pensions and Social Security benefits, 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.

Open A New Account

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 the funds 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.

New York’s Exempt Income Protection Act (EIPA)

You mentioned you reside in New York. Learn more about New York's Exempt Income Protections Act (EIPA), a New York law that went into effect in 2009. According to a New York City Department of Consumer Affairs document Debt Collection: Money Judgments and Frozen Bank Accounts, EIPA "...provides an automatic exemption for the first $2,500 in a bank account where any payments ‘reasonably identifiable’ as ‘statutorily exempt’ were made electronically or by direct deposit during the 45-day period prior to service of a restraining notice or income execution." My reading of this is that you should make sure your funds are directly deposited and not co-mingled with other funds.

Judgment First

Generally, a creditor cannot attempt to levy your accounts until it obtains a judgment against you, so you should have time to take the steps mentioned above to protect yourself. Since I am not New York attorney, I cannot provide you with legal advice, and you should understand the information I provide is general. I do not know enough about your situation or your state's laws to offer any specific advice.

Consult with a New York lawyer to determine what action you should take in regard to the lawsuits filed against you, and what steps you need to take to protect your assets. Because you are disabled, you may be able to find an attorney willing to represent you at little or no cost. Visit the Legal Aid Society of New York's Web site at

Appear in Court

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.

Debt Settlement

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.

Whenever hiring a debt settlement firm, only choose one that does not charge an up-front fee. I also recommend that anyone hiring a debt settlement firm select a firm that is a member of the AFCC (American Fair Credit Council.)


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 bankruptcy information page.

I hope that the information I have provided helps you Find. Learn. Save.



Dealing with debt

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in North Dakota, 18% have student loan debt. Of those holding student loan debt, 5% are in default. Auto/retail loan delinquency rate is 3%.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.



BBilly Ntume Adams, Mar, 2020

I filled for chapter 13 bankruptcy and agreed to pay 140$ a month for 3 years. I owed 12,000$. I'm retired and make over S50,000 in Social Security and NYS pension. Now the bankruptcy court demands I turn over my income tax to the court or they will dismiss my bankruptcy case. I, of course will not, my funds are protected!!

DDaniel Cohen, Mar, 2020

Billy, I am not a lawyer, so what I say is not to be considered legal advice.

The issue as I see it is not about the protected status of your income, but whether you were forthright on your disclosures

It is dangerous to not give the court what they ask for. You agreed to do so when you submitted your bankruptcy petition.  It isn't clear to me if you didn't reveal all your income sources to the court. If that is the case, failure to fully disclose assets or income can lead to serious problems with the trustee and even, in some cases, criminal penalty. Not giving them your tax return certainly risks the bankruptcy being tossed.

JJoseph, Jun, 2012
The information contained in the documents has been more than helpful. You guys are really great at what you do. Thank you!
BBill, Mar, 2010
Susan, you should consult with an attorney - but our understanding is that your estate will be settled in a probate hearing, where your assets and liabilities will be resolved and any remaining assets will be left to heirs.If you have done estate planning, then your estate will be settled according to your estate planning... but seek legal counsel from legal aid or an attorney in your state.Hang in there Susan.
SSusan H. Kerr, Mar, 2010
I was going to claim bankruptcy but Legal Aid told me that I am exempt and could not handle it.I cannot afford $2000 that it would cost to file. I am 70 years old and can't pay off my charge accounts. My main question is that if I die will this money come out of my estate even though I am exempt now. Thank you, Susan Kerr
OOlivia, Mar, 2010
The advise on protecting your pension from garnishment was almost identical to my situation, however I reside in Ohio.
BBill, Dec, 2009
Please see State Consumer Protection Laws and Exemptions for exemptions related to bankruptcy. However, pensions and Social Security income is generally exempt from garnishment. See Garnish Social Security Income for more information.
LLES PINES, Dec, 2009
BBill, Dec, 2009
Social security benefits may not be garnished, nor can other pensions, for unsecured consumer debt. There are exceptions for taxes and child support. See Garnish Social Security Income for more information.
RRhonda.Francis, Dec, 2009
I need to know if any one can hold or garnishee a social security disability check.And does the law protect it as they do with veterans disability checks.