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Bank Garnishment New York

Your defense against New York bank garnishment.

Bank Garnishment

Has your bank account been frozen?

If a judgment has previously been entered against you, a creditor can freeze (a.k.a. garnish or levy) your bank account to ask the court for the money in your account to pay off the judgment. The bank will freeze your account and keep it frozen until the court determines whether the money can rightfully be paid to your creditor or if it is protected by an exemption and shall be returned to you. However, this can only occur once a judgment has been entered against you.

This is another reason why you must immediately deal with a lawsuit once you are served so that it doesn’t result in a bank garnishment which can freeze the money that you were going to use for rent, food, medicine or Christmas gifts. As a former collection attorney who was responsible for the garnishment department, I used to get heartbreaking phone calls on a weekly basis where someone just forgot to take care of their lawsuit and now they were facing a real crisis. These calls came in many forms, such as when a creditor has a judgment against a joint account holder, where they freeze the entire joint bank account until there is a determination whose money is in the account. This frequently occurs with spouses, partners, elderly individuals and their adult children or caregivers, parents who are on their college-aged children’s accounts or parents who open a savings account for their minor child. If you don’t immediately and properly object to the garnishment, the creditor will without thought take all the money from your account including your child’s or elderly parent’s savings.

If your bank account has been frozen, you need to immediately call our office to speak with a debt collection defense attorney. We will find out whether the judgment was properly entered, whether the garnishment was legal and whether you have any exemptions that would protect your money in the bank account. For example, if you were never served with the lawsuit and you first found out about it when your bank account was frozen, you likely have a strong case to removing the judgment entirely. If the judgment and garnishment were properly entered, some or all of the money may be exempt and returned to you, or I can help you settle the judgment in its entirety. You need to get professional and experienced debt collection defense attorney to effectively handle this and any other threatening creditors that you may be dealing with.

How much can my bank account be garnished in New York?

New York State Law protects certain bank accounts from creditors and debt collectors. Certain funds such as government benefits, pensions, and some earned income are protected by the Exempt Income Protection Act (EIPA). Creditors and debt collectors are not permitted to freeze these accounts because of private debts. Under the Exempt Income Protection Act, an account may not be frozen if it contains less than $2,750 and the account contains directly deposited exempt benefits. Additionally, all other accounts totaling less than $2,100 may not be frozen by creditor or debt collectors under EIPA. If you earn $270 or less per week, all of your earned income is exempt from debt collection. If you earn $270 or more per week, 90% of your gross income or 75% of your disposable income, whichever is greater, is exempt from debt collection.

Funds that may be exempt from a debt collection bank garnishment or levy include:

  • Public Assistance
  • Social Security
  • SSI
  • Veterans’ benefits
  • Child Support
  • Spousal Support
  • Worker’s Compensation
  • Unemployment Insurance
  • Railroad Retirement benefits
  • Black Lung benefits
  • Public and Private Pensions
  • Retirement Saving Accounts such as 401(k), 403(b), and Individual Retirement Accounts
  • All of the principal and 90% of the payments from a private trust

However, you must immediately file an objection and assert your exemption and have a hearing in order for the court to consider your exemption. If the Court finds that the funds in an account are exempt from debt collection, a creditor must release the hold on the account regardless of whether there is a judgment against you. You may need to provide proof that the income in the account is exempt, although bank statements from the past three months will usually suffice as proof.

Get help with bank garnishment.

Law Offices of Joseph I Harrison

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