Benefits
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Protecting Your Federal Benefits from Creditors
DISCLAIMER: Use of this informational Handout is not intended to and does not create an attorney-client relationship between you and Legal Aid of Nebraska’s attorneys. The information provided to you through this Handout is intended for educational purposes only. Nothing in this Handout should be considered legal advice or as a substitute for legal advice. Please understand that the information contained in this Handout is based upon generally applicable law. Some laws and procedures may vary. If you want legal advice about your specific issue you must consult an attorney.
Protecting Your Federal Benefits from Creditors
Has a creditor filed a lawsuit against you in court to collect a debt? Did the creditor win a judgment against you? That creditor can now use different ways to try and collect on that judgment through the court.
If your judgment creditor knows where you bank, the creditor may try to garnish the money in your bank account. Garnishment is the legal way that a creditor tries to get your bank to turn over the money in your bank account.
Most federal benefits are “exempt” from judgment creditors. This means the federal benefits can not be taken by a creditor to pay a judgment. But what if you put these federal benefits in a bank account? A federal bank rule says judgment creditors can not garnish federal benefits in a bank account. These judgment creditors can not freeze all the money in your bank account and make you go to court to protect your federal benefits.