The Bad PlaceHome - CBSNews.com | Can a debt collector freeze a bank account that contains Social Security benefits?
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Social Security is the sole source of income for millions of retirees, and while federal law bars private debt collectors from garnishing those benefits, they can still freeze an account that holds them through a bank levy—a legal tool that lets a creditor instruct a bank to lock funds up to the judgment amount without first checking the money’s origin. Banks must conduct a protection review, and if the account has received direct deposits of federally protected benefits (Social Security, SSI, veterans’ benefits, etc.) in the preceding 60 days, they must automatically shield up to two months’ worth of those deposits from seizure; however, this safeguard does not apply to paper‑check deposits or to benefits mixed with other income, leaving those funds vulnerable. To maximize protection, beneficiaries should keep Social Security deposits in a dedicated account, enroll in direct deposit, and, if a levy occurs, promptly request the release of exempt funds, provide documentation of the benefit source, and consider consulting a consumer‑law attorney or credit counselor.
Read more: https://www.cbsnews.com/news/can-debt-collectors-freeze-bank-accounts-social-security-benefits/
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