I never knew what the giant at the top of the beanstalk meant by “FE FI FO FUM”.  Now that I’ve learned a little law, it sounds to me like Jack went up the Beanstalk to get some help on protecting Social Security benefits (a monthly check that replaces part of your income when you lower your house or stop working). Most of my co-workers disagree with me, as they tell me almost daily that I don’t know Jack.  But to be honest, when it comes to protecting Social Security benefits, you don’t need magic beans.  In fact, rather than following Jack up the beanstalk, we’re going down the rabbit hole.  So, move over Alice. 

Sometimes, Social Security benefits are not a part of garnishments (a person’s earnings are to be held by an employer for the paying of debt) by secret creditors. The law gives two ways to help keep your social security benefits safe from these non-governmental collectors. Keep in mind that those benefits must keep the value of “monies” around you for your support to be free from garnishment.  Once you use that money to buy an item, such as a computer, it can be traced back to Social Security benefits.  Follow the rules below and you should be good. 

The first step is already given by your bank where the benefits are directly deposited into your account. It needs nothing done on your part other than making sure the benefits are left in the account that the government put them in.  You get two months’ worth of benefits protected by the bank even if other money has also been deposited into the account.  When other funds that are not Social Security are deposited into the same account, the funds are all said to be linked together. So, under this way of protection, it does not matter if other funds have also been put into the account. Your monthly Social Security benefit is multiplied by two, and that amount is safe – no matter what other funds are put into the account or what was put in first.  There is no fee put on your account by the bank for this protection. To add on, you are not supposed to have to go to court to move this right of protection. It is the bank’s job to provide it already without that money being “frozen” while a court figures out whether the funds can be garnished.  Everything takes place in the background without you having to do a thing.  However, I would tell you to still file a timely objection to the garnishment if the bank doesn’t do its job to protect the funds. If you have more than two months’ worth of benefits in that account, you will need to be able to show that the extra money is from Social Security.  

The second step involves you having to prove that the garnished funds are Social Security benefits. You may have to pay a bank fee when this way is done. This problem can occur if you have more than two months’ worth of benefits in the account where the benefits are directly deposited; or if you have moved the funds into another account.  The garnished funds are frozen, waiting for an answer from the court.  When you are told of the garnishment, you should file an objection to the garnishment and claim the funds as not included due to their status as Social Security benefits if that is the case.  If no other funds have been mixed with the Social Security benefits, it’s a matter of tracing the garnished funds to their start as Social Security benefits.  If other funds are deposited into the account with the Social Security funds, then they will usually be looked at on a FIFO (First In, First Out) reason.  FIFO means the earlier deposited funds are also considered to be the first to be taken out and spent. FIFO is not a worldwide law, but it is typically used. 

In order to up your chances of having the funds moved free from garnishment and to keep your property, I would advise that you not mix other funds in the same account in which your Social Security funds are deposited.  This helps to keep everything nice and neat and to remove most arguments in trying to take those funds. In my experience, most will use FIFO in a normal garnishment problem. Again, if you have over two months’ worth of Social Security benefits in the account, you still need to be on the lookout for claiming that exemption with the court, even if the only funds in the account are Social Security benefits. 

Now, wasn’t that fun?  It may seem too good to be true but trust me, it’s no fairy tale. 

AUTHOR: GARY VANGILDER, STAFF ATTORNEY FOR CENTER FOR ARKANSAS LEGAL SERVICES