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EIPA Exempt Income Protection Act. Does this law really stop bank restraints?

New York, NY |

I read that a new law in January 2009 protects low income folks with direct deposit of exempt funds (SSD/SSI Work comp.) up to $2500.00 and those without direct deposit an amount of appx $1700.00
My concern is that these lawyers of the creditors will still freeze the accounts with the flimsy excuse that "perhaps there are co-mingled funds there. I understand this is wrong and I may be able to get the money back but we poor are still stuck with no money until the paperwork and waiting is over.
My question is: will lawyers still put a freeze on accounts?
I may have to get my checks mailed if so.

Please forgive me but I need to fully understand this answer. You say the restraint will be void is I meet the criteria. First let me say that I easily meet the criteria. All my money is direct deposit from exempt funds (SSD/Work. Comp) I have no co-mingled funds. Also the most I could ever have is less then $1300.00 at one time if both checks came the same day. Now about what you say is "void" does that mean I can still have access to my money or do I have to wait for a judge to free up my money? It just seems to me that they can still restrain the money are you saying they cannot? Thanks

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Attorney answers 1


The creditor can still file a restraining notice against the account however it will be void if there is $1716.00 or less in the account. If the account has more than $1716.00 that amount will remain available and balance may be restrained. If exempt funds are direct deposited the restraining notice will be void if there is less than $2500.00 in the account. If there is more than $2500.00 only the amount over that can be restrained.

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