What kinds of income can be taken out of my bank account?

Exempt income includes

• Social Security, SSD, or SSI 
• Public Assistance
• Veterans Administration benefits
• Pensions (public and private)
• IRAs and other retirement accounts
• Child Support and Alimony
• Unemployment Insurance
• Workers Compensation
• Other government benefits
• 90% of wages or salary earned in the last 60 days
• Wages or salary less than $330 per week after taxes

If all the money you have in your bank account is from government benefits or income types above, a debt collector cannot take any money out of your account.

• Exception: Only SSI and Public Assistance are exempt from the following debts: child support, student loans and tax arrears

If you live on Long Island and your account has less than $2,640 in it, debt collectors cannot take money out of your account or freeze your account.

If you live on Long Island and your account has exempt government benefits and other income (such as wages), debt collectors cannot freeze or take any money out of your account if there is less than $2,850. 

Step 1. Send a letter to the debt collector to tell them you have only exempt income. 

If a debt collector is asking you to pay a debt that you cannot or do not want to pay, you should send a letter telling the debt collector that your income is exempt from debt collection and asking the debt collector to stop contacting you. 

Here is a sample letter to send to a debt collector.

Step 2. Send a letter to your bank to tell them your account has only exempt income.

Here is a sample letter to send to the bank. 

Step 3. Do not ignore any court papers.

If you are being sued for a debt and you only have exempt income, you should still show up for your court date and explain that your income is from government benefits.

You may also be able to receive free legal help. Nassau Suffolk Law Services has a Consumer Debt Legal Assistance Project that may be able to help you. 

If funds are being withdrawn from your bank account, that probably means someone sued you for a debt and a judgment was made against you in court. 

However, your government benefits and other exempt income cannot be withdrawn from your bank account even if a judgment was made against you in court. 

Contact your bank and the debt collector or the debt collector’s attorney.

Remember, the debt collector may be a collection agency and not the original person you owed money to or borrowed money from.

If you think there is a judgment against you, read more about what to do next from NYCourtHelp and learn how to change the judgment against you by asking the court to Vacate the default judgment.

You can file a complaint by calling the NY Department of Financial Services (NY DFS) at 1-800-342-3736.

You can also file a complaint online on the NY DFS website. 

If you owe a debt to the government, such as a tax bill, student loan, or over payment of government benefits, the rules about exempt income are different. 

The government may be able to take your tax refund or your government benefits to pay a debt you owe them without suing you. This is called an offset.

For tax debts call the Touro Tax Debt Clinic in Suffolk at 631-761-7080 or the Hofstra Tax Clinic in Nassau at 516-463-5934.

For public student loans contact the Consumer Financial Protection Bureau or the National Consumer Law Center. For private student loans call Nassau Suffolk Law Services in Suffolk at 631-232-2400 or in Nassau at 516-292-8100.

These are helpful resources about exempt income and debt collection

• Exempt income and frozen accounts
• Protecting Social Security and other Federal Benefits in Bank Accounts

These are helpful resources about what you might need to know if you need to take care of the problem in court

• Money that can't be taken to collect a debt
• How to Vacate Default Judgment in a Consumer Debt Case