Can a creditor take money from my bank account?

 

A new law limits the amount of money that a creditor can take from your bank accounts. The law, called the Exempt Income Protection Act or EIPA for short, says a creditor cannot take all your money. Some of the money in your bank accounts is safe.

How much money in my bank account is safe from creditors?

$1,716 is protected. That means the bank cannot freeze it and your creditors cannot take it. If your account has more than $1,716, your bank must leave at least $1,716 unfrozen.

Can the bank charge me for freezing my account?

Yes, the bank can charge you a fee to freeze your account. But the bank cannot freeze your account more than 2 times in 1 calendar year.

How will I know if my account has been frozen?

If the bank freezes your account, they must send you a Notice and a Claim Form within 2 business days.

What if all of the money in my account was frozen?

The law says the bank must unfreeze the first $1,716. They must also unfreeze any other protected income. (See below.)

Does the law protect any of my income?

Yes! The law says that creditors are not allowed to take any income that you get from:

  • Social Security benefits, including retirement, disability, and SSI

  • Child support and spousal support

  • Public Assistance

  • Worker’s Compensation

  • Unemployment Insurance

  • Veteran’s benefits
     

Is any other kind of income protected?

Yes. The law also protects the following kinds of income:

  • Black lung benefits

  • Railroad retirement

  • Public or private pensions

  • Survivors’ and disability benefits

  • College tuition trusts

  • Life insurance

To see a complete list of other kinds of protected (exempt) income, visit: www.empirejustice.org

What if my protected income is direct-deposited to my account?

If your protected income was direct-deposited 45 days before the bank got the freeze notice, then the first $2,500 of your account must not be frozen. If your account has less than $2,500, then your account must not be frozen at all.

What if the bank froze money that is protected?

Read the Claim Form. It tells you what to do to unfreeze the protected income in your account.

Is there a deadline for me to submit my Claim Form?

Yes! You have 25 days from the date the Notice was mailed. Submit your completed Claim Form and show proof of why your income is protected by the deadline. (The deadline is printed on the Notice.)

What if I have other questions?

You can find more information at these websites:

 

www.lawhelp.org/ny

empirejustice.org

 

 

 

Plain Language by Transcend, 2008. (www.transcend.net)

 

Additional information