I owe a credit card company some money. My only income now is social security disability and a disability insurance payment from my job. Can a creditor freeze my bank account and seize these funds? Should I send a letter return receipt requested to the creditor stating that my income is exempt before they attemp to get a judgement? Right now I'm being hounded with phone calls 6-8x a day from the credit card company.
For a bank account to be entirely exempt from creditors it must only contain social security funds. To be 100% safe you should immediately open a new account at the same bank and direct social security to deposit your monies in that new account. To avoid the account being temporarily frozen you must designate that account as a social security only account with your bank and never make any other deposits to that account. As far as your exemptions in your other account, you are entitled to $300 in PA so just make sure you have less than $300 in that other account. While it may be frozen with a levy you will ultimately get it back.
Another good idea is to switch banks altogether if that is possible. A creditor can not garnish/attach/levy your account if they don't know what bank you use. I recommend using a small local bank and never paying any bills from that account. Pay bills with money orders only so nobody knows the location of your accounts. A creditor need not have a bank account number to levy your account, they only need to know which financial institution has your money on deposit.
Social security income and proceeds are protected from creditors. Make sure that the money is the only thing in the account and that the bank knows this. Sending a letter to the creditor is a good idea to put them on notice as well. The calls will stop. If the debt is turned over to a debt collector, then tell them once to stop contacting you. Any further contact may violate federal law.
[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]
Chapter 7 Bankruptcy Attorney
Don't mix the SS with the pension money. Here are the exemptions in PA:
The State of Pennsylvania has exempted the property and income below from seizure by the bankruptcy court to pay creditors:
Real Property: None.
Personal Property: Bibles, schoolbooks, sewing machine, clothing, unlimited amount [42-8124(a)(1)-(3)]; equipment and uniforms required for military use, unlimited amount [42-8124(a)(4)]
Insurance / Annuities: Fraternal society benefits, unlimited amount [40-1142-403 and 42-8124(c)(8)]; accident or disability benefits, unlimited amount [42-8124(c)(7)]; group life insurance policy or proceeds, unlimited value [42-8124(c)(5)]; insurance or annuity payments if insured is beneficiary, up to $100 per month [42-8124(c)(3)]; life insurance policy proceeds if policy prohibits proceeds being used to pay creditors, unlimited amount [42-8214(c)(4)]; insurance annuity policy proceeds or cash value if beneficiary is insured's spouse, child or dependent, unlimited amount [42-8124(c)(6)]; automobile insurance proceeds (no-fault), unlimited amount [42-8124(c)(9)]
Pensions / Retirement Plans: City employees, unlimited amount [53-13445, 53-23572 and 53-39383]; state employees, unlimited amount [71-5953]; county employees, unlimited amount [16-4716]; municipal employees, unlimited amount [53-881.115]; police officers, unlimited amount [53-764, 53-776, 53-23666]; public school employees, unlimited amount [24-8533]; private retirement benefits deposited more than one year before filing bankruptcy [?]
Public Benefits / Entitlements: Unemployment compensation, unlimited amount [42-8124(a)(10) and 43-863]; workers' compensation, unlimited amount [42-8124(c)(2)]; crime victim's compensation, unlimited amount [71-180-7.10]; veterans' benefits, unlimited amount [51.20012 and 51-20098]
Wages: Earned but unpaid wages, unlimited amount [42-8127]
Miscellaneous: Business partnership property, unlimited amount [15-8342]; any property up to $300 [42-8123]