What to do if I had a bank garnishment and I believe some of my money is exempt?

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What to do if I had a bank garnishment and I believe some of my money is exempt?

I had a bank garnishment. I was told that federal pell grant money is exempt. I also read that 100% of my paycheck is exempt for 60 days if I received need based aid in the last 6 months. Can I exempt my paychecks also because of the federal pell grant money?

Asked on May 11, 2012 under Bankruptcy Law, Arizona

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Although your federal "pell" money may be exempt from a judgment levy in the form of a check sent to you, once the check is deposited into your own general savings or checking account the exemption from levy is then lost and as a result, the entire bank account is subject to a writ of execution.

As to one's pay check being exempt from a garnishment, an employee is entitled to receive 75% of the net pay he or she normally receives when there is a wage garnishment as a general rule and the need based aid claim does not change the 75% rule.

You can make a claim that your pay checks are exempt from levy, but most likely 25% of your net pay will be subject to any wage garnishment.


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