Your Bank Account and Garnishment: Which Federal Benefits Are Protected
You check your balance and it's frozen. A creditor won a court judgment and sent a garnishment order to your bank. If Social Security, SSI, VA or federal retirement money lands in that account, federal rules give you a floor of protection, and the bank has to apply it without you asking.
AT A GLANCE
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How a bank garnishment starts
The CFPB says a private debt collector can't simply take your Social Security or VA money. First it has to sue you and win a judgment. Then it has to get a court order telling your bank or credit union to turn over money from your account or prepaid card.
That's why a lawsuit notice matters so much. The CFPB says that if you don't respond by the deadline in the court papers, the court could enter a default judgment against you, which gives collectors "much stronger tools to collect." Responding doesn't mean you agree that you owe the money.
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The two-month rule, in plain English
The federal rule, 31 CFR Part 212, tells every bank and credit union what to do when a garnishment order arrives.
The bank checks the order. Within two business days, it looks for a "Notice of Right to Garnish Federal Benefits." Only the United States or a state child support agency can attach that notice.
It reviews your account. If there's no such notice, the bank looks back two months to see whether a benefit agency direct-deposited a benefit payment.
It sets a protected amount. The protected amount is the lesser of (a) the total benefit deposits in that two-month window or (b) your balance on the day of the review.
You keep "full and customary access" to that protected amount. The rule says the bank can't freeze it, and you don't have to assert any exemption first.
Money above the protected amount is handled under the bank's normal garnishment procedures, which can include freezing it.
You get a notice within 3 business days of the review if money above the protected amount was frozen.
An account holder shall have no requirement to assert any right of garnishment exemption prior to accessing the protected amount in the account. (31 CFR 212.6)
A worked example
The CFPB uses this example. You get $1,000 a month in Social Security by direct deposit, so $2,000 came in over the last two months.
Your balance on review day | Protected (you can use it) | Can be frozen or turned over |
|---|---|---|
$1,500 | $1,500 | $0 |
$2,000 | $2,000 | $0 |
$3,000 | $2,000 | $1,000 |
If the balance is below the two-month total, the whole balance is protected, because the rule protects the lesser of the two numbers.
Other details that help you
Mixed money doesn't cancel the protection. The bank must do the review regardless of other funds mixed into the account, a co-owner on the account, benefits for more than one person or what the debt is for.
Each account gets its own review. The bank can't try to "trace" benefit money you moved from one account to another.
One review per order. The bank can't keep garnishing new deposits that arrive after the review unless it gets a new or different order.
Fee limits. The bank can't charge a garnishment fee against the protected amount. It can charge one only from non-benefit money deposited within five business days after the review, up to that amount.
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Which benefits are protected
There are two layers, and the difference matters.
Benefit | Automatic two-month bank protection (31 CFR 212)? | Protected from garnishment per CFPB (may need to claim it)? |
|---|---|---|
Social Security | Yes | Yes |
SSI | Yes | Yes |
VA benefits | Yes | Yes |
Federal civil service retirement and disability (OPM) | Yes | Yes |
Railroad retirement | Yes | Yes |
Servicemember pay; military annuities and survivor benefits | No | Yes |
Federal student aid | No | Yes |
FEMA financial assistance | No | Yes |
For benefits in the last four rows, the bank isn't required to run the automatic review. If that money gets frozen, you'll likely need to go through the court exemption process to get it released.
The CFPB also notes that state law may protect more. The bank's notice must tell you that you can claim a further exemption above the protected amount.
When the bank doesn't automatically protect your money
You deposited a paper check. The CFPB says the entire balance could be frozen, and you'd need to go to court to show the money is from protected benefits.
The order comes from the federal government or a state child support agency with the special notice attached. The bank follows its normal procedures instead.
The money arrived more than two months ago and has built up above the two-month total.
You gave written permission. The rule lets the bank honor a dated, written instruction from you, made after it receives the order, to use protected money to pay the debt. Don't sign one without legal advice.
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Government debts: different rules
The CFPB says Social Security and SSDI can sometimes be garnished to pay money you owe the government, such as back taxes or federal student loans, and for child or spousal support. SSI is protected even from those.
For federal non-tax debts collected through the Treasury Offset Program, 31 CFR 285.4 limits how much can be taken from a monthly Social Security benefit or Railroad Retirement benefit (other than tier 2). It's the smallest of:
The debt itself, including interest and fees
15% of the monthly benefit
The amount by which the monthly benefit exceeds $750
Monthly benefit | 15% | Amount over $750 | Maximum monthly offset |
|---|---|---|---|
$850 | $127.50 | $100 | $100 |
$1,250 | $187.50 | $500 | $187.50 |
These examples come straight from the regulation. A benefit of $750 or less a month can't be offset under this rule. SSI payments aren't covered by it at all.
If your account is frozen
Before you call
☐ The bank's garnishment notice (it must give the creditor's name, the date the order was served and the protected amount)
☐ Your benefit award letter or a printout showing the monthly amount
☐ Bank statements for the last two to three months showing the direct deposits
☐ Any court papers you've received
☐ A list of bills that are due in the next two weeks
Step by step
Read the bank's notice. Check that the protected amount matches two months of your direct-deposited benefits.
Call the bank if the number looks wrong. Ask how it calculated the protected amount and which deposits it counted.
Use the protected money. You're allowed to pay bills and withdraw cash from it as usual.
Claim your exemption fast. For frozen money above the protected amount, follow the exemption steps in the notice. The CFPB says to notify the court, the bank and the creditor in writing right away that your money comes from protected benefits. It also offers a sample letter you can adapt.
Get free legal help. The CFPB points to legal aid offices. Adults 60 and older can call the Eldercare Locator at 1-800-677-1116 for local resources, including free legal aid.
Switch to direct deposit if you're still getting paper checks, so the automatic protection applies next time.
If the bank didn't follow the rule, you can submit a complaint to the CFPB. The federal banking agencies enforce Part 212.
WHAT TO DO THIS WEEK
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Related help
If you've got collectors calling about old bills, start with free and low-cost debt relief help. If Social Security says you were overpaid, see how to answer an SSI overpayment letter and request a waiver. For a tax debt or an IRS dispute, read about Low Income Taxpayer Clinics.
Official sources
Last checked: October 23, 2026 (31 CFR Part 212 and 31 CFR 285.4 as published on eCFR; CFPB federal benefits garnishment page, last reviewed January 29, 2024; CFPB debt lawsuit page).
State garnishment exemptions vary and can protect more than federal rules. Talk to a legal aid office about your state's process. This is general information, not legal advice.
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