[llmoore]

Several years ago my mom lost her job and is now on SSI. She has outstanding CC debt that she can't pay. Recently the CC company garnished her bank account for the whole amount she had in there. I know that SSI cannot be garnished. What should she do to get the money back and stop this from happening in the future?

[DrJ]

There is a difference between a wage garnishment and a bank levy. If the money is sitting in a bank account, they can levy it, regardless of where it came from (SSI, etc.)

Once it's in a bank account that they are aware of, it's fair game.

If it were me, I would either stop using a bank account altogether (just cash my SSI check, get money orders for bills and use cash for the rest)... or just open a new bank account. The credit that has the judgment has no way of finding out about that new account and therefore will not know where/who to levy.

[ScottGem]

The credit that has the judgment has no way of finding out about that new account and therefore will not know where/who to levy.

That is not true. It may take them longer to find it but there is a good chance they will find it.

But you are correct that once the money gets into the account the creditor has no way of knowing whether its protected income or not. So they can attach the account.

What mom can do, is file a motion to vacate the levy on the grounds that the money in there was from protected sources. She will have to show documentation of what was protected if there are other funds. I would then use the account ONLY for deposit of her SSI and let the bank know that so they can refuse other levies.

[DrJ]

Scott is correct. It is possible that they could find out about it. If the amount of money owed is great and the potential to recover it is good also, it may be worth it to them to actively attempt to obtain that information.

But for the most part, that info is not readily available and therefore, not easily obtained.

[ScottGem]

But for the most part, that info is not readily available and therefore, not easily obtained.

Oh? Banks will frequently run a credit check before opening a new account. That check may appear on a credit report and give the creditor a heads up!

[DrJ]

Oh? Banks will frequently run a credit check before opening a new account. That check may appear on a credit report and give the creditor a heads up!

Ive never heard of, nor ever experienced, a bank checking your credit report to open a checking or savings account.

They will run your name against Check Systems but of all the checking accounts I have opened (and there have been a few), I have never had my credit checked.

If you were trying to get a credit card associated with your account, then yes, they would obviously check it then. But other than that, why would they check your credit? A checking account has nothing to do with your credit as it is based on actual funds available.


EDIT: I am not referring to Credit Unions. They might.. I don't know.

[ScottGem]

If you were trying to get a credit card associated with your account, then yes, they would obviously check it then. But other than that, why would they check your credit? A checking account has nothing to do with your credit as it is based on actual funds available.


EDIT: I am not referring to Credit Unions. They might.. I don't know.

How do you know? Unless you are using a credit monitoring service you may never know. Also people frequently open accounts with overdraft privileges which may trigger a credit check.

[DrJ]

How do you know? Unless you are using a credit monitoring service you may never know. Also people frequently open accounts with overdraft privileges which may trigger a credit check.

Ok, I have overdraft privileges and my credit was never checked. However, if you needed one with a high enough protection amount, I could see how a bank could do that.

And yes, I have always used a credit monitoring service for myself and I have spent years inspecting clients credit reports.

Aside from that, inquiries that are visible to other creditors are only inquiries that were authorized by the debtor (or person opening the bank account, in this matter).

So to clarify further for the OP, if you were to open a new account and you wanted to fly under the radar, you would want to open a basic checking account at a regular bank (not a credit union) that does not have overdraft protection.