Treasury Issues News Rules Covering Directly Deposited Benefits
Tuesday April 12, 2011
In spite of long-standing statutory provisions protecting Social Security and other federal benefits from creditors, judgment-creditors routinely get banks to freeze accounts containing exempt funds and regularly satisfy their judgments with such funds, often leaving the account-holder destitute.
This situation will change on May 1, 2011 when new rules go into effect governing garnishment from accounts into which certain exempt federal benefits are directly deposited. The new rules are designed to assure the account holder of uninterrupted access to at least two months worth of benefits.