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.
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 and 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);
• Supplemental Security Income benefits;
• Temporary Assistance for Needy Families benefits (state welfare. If you’re on it, you know);
• Aged, blind or disabled benefits (state disability. If you’re on it, you know);
• Unemployment compensation (unless you owe child support);
• Veterans Administration 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.
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 might 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 might 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 per week;
• $840 every two weeks;
• $910 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 a certain amount of your wages might 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 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 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 director of Clallam/Jefferson Senior Information & Assistance, which operates through the Olympic Area Agency on Aging. He is also a member of the Community Advocates for Rural Elders partnership. He can be reached at 360-452-3221 (Port Angeles-Sequim), 360-385-2552 (Jefferson County) or 360-374-9496 (West End), or by emailing [email protected].