GARNISHMENT OF SOCIAL SECURIRY BENEFITS AND OTHER BENEFITS

Recently, I was asked the following: a client had a money judgment against them. The client's bank had contacted them and stated that it had just received an information subpoena from the judgement creditor asking if they had any funds. The question was: Would the client lose the funds as this account was only used to receive direct deposits of a social security benefit. The answer was in CPLR 5205. New York CPLR 5205 generally exempts for garnishment social security benefits. The judgment-creditor will have to look elsewhere to satisfy the judgment. Here is the pertinent provision: CPLR 5205 (l) Exemption of banking institution accounts into which statutorily exempt payments are made electronically or by direct deposit. 1. If direct deposit or electronic payments reasonably identifiable as statutorily exempt payments were made to the judgment debtor's account in any banking institution during the forty-five day period preceding the date a restraining notice was served on the banking institution or an execution was served upon the banking institution by a marshal or sheriff, then two thousand five hundred dollars in the judgment debtor's account is exempt from application to the satisfaction of a money judgment. Nothing in this subdivision shall be construed to limit a creditor's rights under 42 U.S.C. § 659 or 38 U.S.C. § 5301 or to enforce a child support, spousal support, alimony or maintenance obligation. Nothing in this subdivision shall alter the exempt status of funds that are protected from execution, levy, attachment, garnishment or other legal process, pursuant to this section or under any other provision of state or federal law, or shall affect the right of a judgment debtor to claim such exemption. 2. For purposes of this article, "statutorily exempt payments" means any personal property exempt from application to the satisfaction of a money judgment under any provision of state or federal law. Such term shall include, but not be limited to, payments from any of the following sources: social security, including retirement, survivors' and disability benefits, supplemental security income or child support payments; veterans administration benefits; public assistance; workers' compensation; unemployment insurance; public or private pensions; railroad retirement; and black lung benefits. 3. (i) Beginning on April first, two thousand twelve, and at each three-year interval ending on April first thereafter, the dollar amount of the exemption provided in this section, subdivisions (e) and (h) of section fifty-two hundred twenty-two, subdivision (a) of section fifty-two hundred thirty and subdivision (e) of section fifty-two hundred thirty-two of this article in effect immediately before that
date shall be adjusted as provided in subparagraph (ii) of this paragraph.

Other assets are protected under the statute and will be discussed later but again, always consult a lawyer and have that lawyer review the full statute when you are faced with a judgment creditor.