Asset Garnishments: Knowing Your Rights

Some assets and income cannot be garnished, meaning such assets are exempt from forceable seizure. Creditors can’t take such funds from your bank account to collect on debts you owe. However, if none of your income is exempt, a creditor may take all the money in your bank account. If any of your exempt income is being garnished, you can file an objection in court. If you file it quickly, you may be able to stop the garnishment.

To learn about garnishments in the most general sense, Turner Law has created a brief overview of garnishments.

Income and assets generally exempt from garnishment include:

1. Social Security benefits and disability payments
2. Supplemental Security Income (SSI) payments
3. Veterans’ Benefits
4. Civil Service and Federal Retirement and Disability Benefits
5. Military Annuities and Survivors’ Benefits
6. Railroad Retirement Benefits
7. Merchant Seamen Wages
8. Longshoremen’s and Harbor Workers’ Death and Disability Benefits
9. Foreign Service Retirement and Disability Benefits
10. Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
11. Federal Emergency Management Agency (FEMA) Disaster Assistance
12. General Assistance Benefits
13. Family Independence Program (FIP) grants
14. Food Assistance Program (FAP)
15. Electronic Benefits Transfers (EBT)
16. State Disability Assistance
17. Individual Retirement Accounts (IRAs)
18. Student loan disbursements, grants, or work assistance
19. Unemployment Compensation benefits
20. Worker’s Compensation benefits
21. Cash value of life insurance policies that are payable to your spouse or children
22. Income benefits under the Michigan Civil Service Act
23. Income benefits under the Michigan Retirement Act
24. Pensions covered by ERISA

There are some exceptions to that list. For example, Social security disability and retirement benefits can be garnished to pay federal taxes, child support, and alimony.

• SSI payments can’t be garnished under any circumstances;
• Pension income can be garnished once it’s in your bank account.
• Income from the other sources listed above stays exempt once it’s in your bank account. (It’s best to avoid putting it in the same bank account with non-exempt income.)

For more information on whether awards from a settlement are subject to garnishment, contact the attorneys at Turner & Turner for advice on how best to avoid seizure of assets, including settlements. Call Turner Law at (248) 355-1727.