Protection from Money Judgments

Information on judgments, liens, and garnishments.

1. The New York Exempt Income Protection Act prevents judgment creditors from taking certain funds in bank accounts to satisfy money judgments. A levy is a legal order requiring a bank to remove money from your account and turn it over to the judgment creditor or collection agency that has the judgment against you.

• Under the EIPA, the following funds cannot be frozen:

  • The first $1,920 in any bank account

  • The first $2,625 in any bank account that has had money directly deposited from following sources:

    • Social Security benefits

    • Supplemental security income (SSI)

    • Disability benefits

    • Child support payments

    • Worker’s Compensation benefits

    • Veterans Administration benefits

    • Railroad Retirement benefits

    • Public or private pension payments

    • Unemployment benefits

    • Public assistance

      • All of the above sources of income are exempt from levy

If your account contains less than the amount you can exempt, then the restraining notice sent by the creditor to the bank is considered void – in other words, the bank gets to rip it up and ignore it. The EIPA also requires the judgment creditor to issue exemption forms to the bank to give to you, and to appropriately address any claimed exemptions.

Notes and Exceptions:

• The EIPA does NOT prevent a judgment creditor from taking a portion of your income (wages/salary) to pay off the debt. The amount of the judgment will accumulate interest over time if it goes unpaid.

• If the State of New York or any of its agencies or municipal corporations is the judgment creditor then all of your funds can be frozen.

• If the debt being enforced is for child support, spousal support, maintenance or alimony then the exemption doesn’t apply either.

2. The Consumer Credit Protection Act (CCPA) prohibits your employer from firing you due to the wage garnishment (unless you have been garnished for more than one debt) and limits the total amount of your earnings that can be garnished in one week.

Possible remedies:

• Negotiating with the creditor

• Filing for bankruptcy

• Allowing creditor to garnish your wages

• If a judgment creditor levies a bank account containing exempt funds, you may be able to get the money back. The court has a free form that can be used for this purpose called an Exemption Claim Form.