A debtor can garnish a bank account if he has authority from the court allowing the garnishment. Until recently, garnishment took place even when the bank account included Social Security funds, even though benefits are considered safe from garnishment in most cases. A joint account is not exempt from garnishment because the account is owned entirely by both people listed on the account. Special rules now apply if Social Security benefits are deposited in a recipient's bank account.
Garnishment by Creditors
Section 207 of the Social Security Act prohibits garnishment of Social Security benefits for a debt. Debts, as defined by the act, may include personal loans, credit card accounts, a loan on your car or even your home mortgage. Creditors exploited a loophole in the law to access bank accounts where Social Security funds were deposited to collect past-due debts.
Garnishment Loophole
Before May 1, 2011, when a bank received a garnishment order, it froze your account and collected fees for freezing the account, along with overdraft debits and other bank-specific charges. Although creditors did not directly garnish a benefit check, this garnishment loophole allowed creditors to garnish benefits if your Social Security check had been deposited in the account.
New Rules for Garnishment
As of May 1, 2011, the United States Treasury Department enacted a rule that makes it more difficult for creditors to garnish bank accounts that contain Social Security benefit funds. The new rule requires banks to identify protected funds, such as Social Security benefit deposits, and preserve them from garnishment. Banks must now identify deposits made in the previous 60 days and guard the total of two month's Social Security benefits if the funds were deposited in that time frame. Other funds in the account may be attached under the garnishment order.
Considerations
Social Security benefits may be garnished directly to pay domestic support orders such as alimony and child support. Additionally, the Internal Revenue Service can levy against benefits to repay a delinquent tax bill. Other federal agencies may also garnish your Social Security check for repayment purposes. Specific civil penalties, if levied under the Mandatory Victim Restitution Act, may cause garnishment of your Social Security benefits as well. If the person receiving benefits receives Supplemental Security Income, those funds, provided through the federal government's general fund, may not be levied or garnished for any reason.
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