From the Small Business Times of Wisconsin:
U.S. Senators Herb Kohl (D-Wis.), chairman of the Senate Special Committee on Aging, and Claire McCaskill (D-Mo.) have introduced the Illegal Garnishment Prevention Act, a bill that would prevent the U.S. Department of Treasury from promoting the use of direct deposit for Social Security beneficiaries until they put a stop to the illegal garnishment of government benefits from the bank accounts of private citizens.
With increasing frequency, financial institutions are garnishing or freezing funds on behalf of creditors from bank accounts into which Social Security, Supplemental Security Income (SSI) and Veterans benefits are electronically deposited, despite clear protections in federal law against the garnishment of such benefits, Kohl said.
2 comments:
I always thought that once the money was in a private account, it was no longer "benefits" but just an asset of the individual. If you change the law so the money can never be touched by creditors does that mean that people on social security never have to pay their debts?
If the money is clearly identifiable as T2 or T16 funds--no other deposits being made, for example--then the account cannot be garnished. Banks ignore this all of the time, and beneficiaries have to fight with the bank to resolve it. As far as paying debts, it would be no different than receiving a paper check, which cannot be garnished.
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