Disability Payments Aren’T Part Of Garnishment Calculations

[pacmanx1]

Vermont High Court: Disability Payments Aren't Part Of Garnishment Calculations. Leagle, Inc. The Supreme Court of Vermont, in Cote v. Cote, decided August 12, overturned a lower court's inclusion of veterans' disability payments within the total income of a husband whose Social Security payments were being garnished after he failed to make court-ordered alimony payments. The Federal Consumer Credit Protection Act caps at 55% the percentage of aggregate disposal earnings that may be garnished; by including the husband's monthly $2,721 veterans' disability payment within its calculation of his aggregate disposal earnings, the lower court had garnished his entire $1,569 Social Security payment. The state Supreme Court ruled, however, that veterans' disability payments were not "remuneration for employment" within the meaning of federal law, and therefore should not be counted. As a result, 55% of the husband's Social Security payment was all that could be garnished.

http://www.veteranst...ans-stories-28/

Edited August 15, 2011 by pacmanx1

[broncovet]

I would say this is good, but the problem is that only a few of us live in Vermont. I understand that excluding Veterans disability compensation from garnishment is kinda left up to individual banks. While it is usually wrong, the Veterean, after his money had been garnished away, probably cant afford a lawyer to fight it, and the banks know this. So it continues. An unenforced law has little effect.

[iceturkee]

i would say this, when my disablity rating increased 4 years ago, the paperwork included with the rating decision clearly states that disability compensation is exempt from creditors. i would think that would include alimony payments, regardless of state. perhaps, i'm wrong.

btw, the paperwork i received with my recent depression determination said the same thing.

[GuaymasJim]

There is a great deal of BS on the net about this subject. There is also a great deal of misinformation out there.

Here is a trove of accurate information:

http://www.vawatchdo...ld_Support.html

Here is some legal discussion:

http://www.disabilit...ony-divorce.cfm

Just make sure you know what you are doing before you do it.

bandido60: You are totally wrong on a number of levels. VA and SSA compensation is very well protected in a bank. SSA recipients who get paid by check are receiving a letter this month that states that they must either get a bank account for direct deposit or they will be issued a government "debit card."

Look here for the protections:

http://www.creditcar...-funds-1282.php

Basically, the bank must protect funds in your account from seizure up to an amount equal to two months payments even if the funds have been co-mingled with other funds. It is the bank's responsibility to identify and protect exempt funds.