Can a Credit Card Company Freeze My Bank Account in Texas?

Question from Sue, Can a Credit Card Company Freeze My Bank Account in Texas?

Answer from AI:

If you are retired and only receive Social Security benefits, you might be concerned about a credit card company freezing your bank account due to a judgment. Understanding your rights and the legal framework in Texas can help you navigate this situation.

Understanding Judgments and Bank Account Freezes

When a credit card company wins a judgment against you, they can take steps to collect the debt. One common method is to freeze your bank account. However, certain types of income, such as Social Security benefits, are protected from garnishment under federal law.

Federal Protections for Social Security Benefits

Under federal law, Social Security benefits are generally protected from garnishment by creditors. According to the Social Security Administration (SSA), these benefits are exempt from most creditors’ claims, including credit card companies. This protection is outlined in Section 207 of the Social Security Act.

Texas State Law on Bank Account Garnishment

Texas law also provides certain protections for debtors. In Texas, creditors can garnish bank accounts, but they cannot garnish wages for consumer debt. However, they can still attempt to freeze your bank account to collect on a judgment.

Steps to Take if Your Bank Account is Frozen

If your bank account is frozen, and it contains only Social Security benefits, you should take the following steps:

1. Contact Your Bank: Inform your bank that the funds in your account are from Social Security benefits. Banks are required to protect two months’ worth of Social Security benefits from garnishment.
2. Provide Documentation: You may need to provide documentation to your bank showing that the funds are from Social Security. This can include bank statements or letters from the SSA.
3. File a Claim of Exemption: In Texas, you can file a “Claim of Exemption” with the court that issued the judgment. This legal document asserts that the funds in your account are exempt from garnishment.
4. Consult a Legal Professional: It is advisable to seek legal advice to ensure your rights are protected. An attorney can help you navigate the process and file the necessary paperwork.

Resources and Legal Assistance

For more information and assistance, consider the following resources:

• Social Security Administration: Your Payments While You Are Outside the United States
• Texas Law Help: What to Do If Your Bank Account Is Frozen

When to Seek Legal Advice

If you are facing a bank account freeze and your only income is from Social Security benefits, it is crucial to seek legal advice. An attorney can provide personalized guidance based on your specific situation and help you protect your exempt funds.

Remember, while general information can be helpful, only a legal professional can offer advice tailored to your unique circumstances.