Have a separate account for social security Benefits? (marriage, state, legal)
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We had an employee who owe a lot in taxes. He said the govt took a tiny bit out of his SS every month but he would die long before the taxes were paid off.
He worked for us part time, got a w9 every year. We paid taxes on him. Don't know why they never came after those taxes by garnishing his wages?
Because there are laws limiting the government from attaching your Social Security for over a certain % of money.
They take it right out of the person's check before the deposit.
The OP is talking about regular bill collectors not the US government, I believe.
I've heard if you have your benefits on it's own account it's protected from any bill collectors. True?
No.
The origin of money is not imputed knowledge.
Since every State is slightly different, you'll need to refer to the laws of your own State. Generally, the procedure is this:
1) A creditor, debt collector or junk debt buyer files a lawsuit seeking judgment....here's where it varies among States. Some States permit what are known as pre-judgment levies or liens on bank accounts and properties. If you live in such a State, you could get jammed up as your bank account is frozen and you cannot access funds. If you don't have cash-on-hand or credit cards, you won't be able to purchase anything and may not be able to pay rent or make car payments or other payments like auto insurance.
2) You're served with a summons to appear in court as Defendant. Depending on the State, you have anywhere from 14 days to 30 days to file an answer to the lawsuit. If your bank account has been levied, it is here that you would file a motion with your answers to unfreeze your account. If you cannot afford a lawyer, there are plenty of web-sites that can help you prepare your answers and the motion. Although it isn't necessary at this time, you may also provide a list of your bank accounts, other accounts (401, IRA and such) and other assets, including automobiles and properties.
3) If you file an answer (and motion if applicable) your case will be calendared and you'll be notified of an appearance date. If you fail to answer, the Plaintiff will file a Motion for Default Judgment. Note that if your bank account is levied and you fail to appear and lose by default, your bank account is still levied. There are some States that will allow bank accounts to be levied or property to be attached at this time.
4) If you lose the trial (a bench trial before a judge unless you request a jury trial when you filed your answers -- your right under the 7th Amendment) or lose by default, the court will send you another summons to appear for what is typically known as a Debtor's Examination.
5) At the Debtor's Exam, you are required to provide details of all of your income, accounts and assets. It is at this time that you would declare your income to be Social Security benefits. If you fail to appear at the Debtor's Exam, some States will issue a capias (bench) warrant for your arrest (it is unlikely that police will appear at your home, rather it is more likely you'll get picked up during a traffic stop). Also, note that if you fail to appear, there is no evidence your income is Social Security, so you will lose whatever money you have in your account. The statute of limitations for a judgment varies by State from 5 to 25 years, and it will appear on your credit report for 10 years (or less if the statute of limitations is less than 10 years).
So, in the end, you won't lose that money that is provided by Social Security so long as you are present at all of your court dates, but you could suffer financial headaches from the ordeal.
like everything we do , we plan around what is best and most plausible for the likely outcomes . i can't say i ever made decisions about keeping separate ss counts or kept 401k's with old companies because i was afraid of creditors .
Yes, that is true. Banks won't allow a creditor to levy your bank account, if the only deposits in it are monies that are protected from judgments - which would be your social security deposit, with some exceptions.
Just never mix other deposits into that account. If it's not clear that all of the money is from SSA, then it can be levied, and then you would have to prove how much was protected money and how much wasn't - which they could then take. And, if it gets levied, the bank also charges you a fee for dealing with the levy.
Here's a good article on it by the Nolo Press website that explains exceptions, limits on how much can be protected (just 2 months worth of deposits, so best not to keep more than that much in the bank), etc.:
So, one can open a new checking or savings and have all their SS checks deposited for years and all that money is protected? Or just 2 months?
It depends on your State, as I outlined above. In the end, you will be protected, but you might have to endure some extreme hassles before you get to that point.
So, one can open a new checking or savings and have all their SS checks deposited for years and all that money is protected? Or just 2 months?
The way I read it, it's just two months. So, in my opinion, any amount in excess of 2 months worth of deposits that's in your account, would be available to be levied by the creditor. I'm no expert, but that's what it looks like to me. It only said 2 months worth of deposits would be exempt.
like everything we do , we plan around what is best and most plausible for the likely outcomes . i can't say i ever made decisions about keeping separate ss counts or kept 401k's with old companies because i was afraid of creditors .
You've been really blessed not to ever have been in the position to have lost your home to foreclosure or become disabled, or never made enough money to have a large savings account when you lost a job, or lost everything in a divorce, etc.
I'm honestly happy for people in that position. I would hope that those people may be able to have empathy for those less fortunate.
The way I read it, it's just two months. So, in my opinion, any amount in excess of 2 months worth of deposits that's in your account, would be available to be levied by the creditor. I'm no expert, but that's what it looks like to me. It only said 2 months worth of deposits would be exempt.
You obviously ignored this part from "nolo":
A creditor can still have your account frozen by serving the bank with a garnishment or attachment and, if you don't respond to claim your exemptions, the funds can still be paid over to the creditor. Even if you do assert your exemptions, the funds will remain frozen and not accessible to you until the matter goes before judge for a ruling on the claims.
I hope you like hassles.
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