Is Unemployment Income Exempt From Bank Lien? (lawyers, unemployment benefits)

[LaurieW72]

I am currently unemployed & living in NJ. My ex-husband received permission from a judge to place a lien on my checking account for money do to him. Is my unemployment income exempt from such a lien? How can I find out for sure?

[Gerania]

liens/levies

Property Exempt From Levy, second item, Unemployment benefits.

You might be OK but don't take my word or the print in that site as the truth. There may be a glitch somewhere.

Many lawyers will give you a (free) ten minute consultation. They need to know if you/they have a case. If they can spend 5 minutes explaining how you can clean up your own mess, most will.

Search the internet; read a lot and take notes. You'll be able to make some sense of this mess.

[NJGOAT]

Originally Posted by LaurieW72

I am currently unemployed & living in NJ. My ex-husband received permission from a judge to place a lien on my checking account for money do to him. Is my unemployment income exempt from such a lien? How can I find out for sure?

You need to get in touch with the manager of your bank branch where your account is held and discuss this with them. While unemployment benefits are not subject to liens/levies, the fact that it is placed on the account can freeze the account until you can prove that all funds in that account are only from the exempt UE benefits.

For example, say the account has $1,000 in it, $800 are from UE benefits, they can technically seize the other $200 leaving only the $800. In general the recommended advice would be to only have exempt deposits going into that account and clearing out any money that can not be traced to have come from the exempt benefits before the account is frozen.

Consulting an attorney is good advice, but you can be a little proactive by discussing this with the bank and getting ahead of it before the account is frozen.

[delicateflower]

A lien was just placed on my bank account. I had $96.00 in the account and the lien was for 100. Now I have an overdraft fee for the bank. Shouldn't the bank have notified the lien holder with the amount before releasing more money then I had? Also I collect unemployment in NJ, is this at frisk of being taken also?

[NJGOAT]

Originally Posted by delicateflower

A lien was just placed on my bank account. I had $96.00 in the account and the lien was for 100. Now I have an overdraft fee for the bank. Shouldn't the bank have notified the lien holder with the amount before releasing more money then I had? Also I collect unemployment in NJ, is this at frisk of being taken also?

The bank would look at the lien the same way they would like at an item being presented for payment. So, since you had $96 in the account, the bank looked at it the same way they would if you had written a $100 check and extended you "overdraft protection" and applied the applicable fee. If you don't want them to do this in the future, ask them to remove all overdraft protection from your account. They will argue that this is a "free service" and guarantees that they will never decline a payment. The trick is that they can only charge you a fee if you agree to the protection and many times they will still process the transaction, leaving you negative the difference, but no fee. The risk you run is of course bouncing a check or having a debit card transaction declined.

There is nothing you can do about what the bank did, it's done and over with. In most cases a bank will remove one or two overdraft fees in the course of a year as a courtesy. So, if you've never asked them to waive the fee, now would be a good time, especially if you can deposit the $4 or so to bring the account positive.

As far as UI benefits go, while they technically cannot be siezed by a lien if you deposit your UI check into an account with a lien on it there is a good chance they will take the money. You would then need to go back to the bank and prove that the only money in the account was the UI benefits and that the money should not have been released to the lienholder. This is a complicated and time consuming process. For that reason you should do one of the following since your current account has a lien on it:

1. Open a new bank account and solely use it for your UI benefits to be deposited.
2. Talk to the bank about your existing account, explain the only money going into it will be your UI benefits and then only use your current account for UI benefits.
3. Have your UI benefits deposited onto a debit card or have a check sent directly to you versus direct deposit. The debit card will never have a lien placed on it. If you get a check, cash it and don't deposit the money in a bank account.