Tips for minimizing damage from garnishment
October 9, 2019
By: Mark Harvey
Email: harvemb@dshs.wa.gov
This isn’t fun, or funny, but it could be important.
This is about garnishment. “Garnishment” is what happens when a creditor comes after your money to pay off a debt that you owe.
Let me begin by being blatantly clear: In my opinion, we should all pay off the debts we’ve incurred, so I’m not one for “finding a way around” that responsibility; that said, I also encounter more and more Elders who have been squeezed into untenable financial positions (often, due to medical bills, relatives’ student loans, an increasingly difficult economy, etc.) and for whom basic survival could be in question, and THAT doesn’t help ANYBODY! – So, here we go.
Most garnishments will be for judgments for consumer debt, which includes credit cards, doctor and hospital bills, utility bills, phone bills, personal loans from a bank or credit union, debts owed to a landlord or former landlord – Those sort of things. While every case is different, and you’d be smart to see an attorney about your specific situation, here are general “exemptions” from garnishment meaning, these types of income couldn’t be touched:
- Social Security disability and retirement benefits (unless you owe child support, federal student loans, or a federal tax debt);
- SSI benefits;
- TANF benefits (state welfare – If you’re on it, you know it);
- ABD benefits (state disability – If you’re on it, you know it);
- Unemployment compensation (unless you owe child support);
- VA benefits (with some exceptions for money you owe the government or for support);
- Federal student loans;
- Child support you receive;
- …and most pensions.
Money in your bank account can be exempted, to certain limits:
- $2,500, is exempt, if the judgment is for private student loan debt;
- $2,000 is exempt, if we’re talking about consumer debt…
- …and $500 is exempt for all other debts plus $1,000 additional cash, for a total of $1,500.00
Here are a couple of things to consider: do NOT put any money, other than Social Security and VA benefits in a bank account, if you can help it, because even though some/all of your money may be exempt, the bank could “freeze” your account – Oops!
Also, you might want to try to avoid having pension checks direct-deposited into a bank account, because some pensions may not be exempt.
Now, what if you’re working? (Yes, Virginia, many Elders still work, often because they have to!) If you earn less than these amounts, none of your wages can be garnished:
- $420.00/week;
- $840.00 every two weeks;
- $910.00, twice per month, or
- …$1,820 monthly.
And here’s a thought: If possible, try to avoid having your paycheck direct-deposited. Why? Well, while certain amount of your wages are/can be exempt from garnishment at the time your employer pays you, a creditor could argue that, once the money is in your bank account, those funds are no longer exempt.
It’s complicated, I know – And, depending upon your particular situation, it could be more complicated. My point today is simply to try to provide some degree of relief/comfort/hope to Elders who could be – Literally! – Looking at homelessness.
I’ve been working here from information posted on https://www.washingtonlawhelp.org/ , which is a free site, maintained by the Northwest Justice Project. It is a WONDERLAND of good, free and understandable legal help, so I hope you won’t hesitate to go have a look for yourself.
And I hope that neither you nor anyone you care about cares about any of this! But, if you do, it isn’t pretty and can be very scary.
This is public information and you have a right to know it.
Mark Harvey is the director of Information and Assistance for Olympic Area Agency on Aging. He can be reached at harvemb@dshs.wa.gov or 532-0520 in Aberdeen, (360) 942-2177 in Raymond or (360) 642-3634. FACEBOOK: Olympic Area Agency on Aging-Information & Assistance.