Legal Question in Credit and Debt Law in North Carolina

Garnishment and levy on bank accounts can usually only be done after entry of a judgment.

Social security cannot be garnished for ordinary things like credit card debts. Social security can only be garnished for things like child support, taxes owed to the IRS or a Social security overpayment or debts owed to some other federal agency.

Bank accounts can be levied upon. However, whether the funds can be taken depends on the source of the funds. If a person's only income is Social security or other exempt funds (unemployment, veterans's benefits or retirement) then as long as the exempt funds are not (a) commingled with non-exempt funds or (b) commingled with the non-exempt funds of another person, then the bank account cannot be touched.

If you are anticipating some type of legal action, I would make sure that you talk with your bank manager and set up a bank account (might be called a special purpose bank account) if one is not already in place. Make sure that only Social security or other exempt funds go into the bank account and make sure the bank is aware of this fact. It would be great if the bank could give you a letter to this effect. You can have Social Security direct deposited into this account. Don't have a joint account with anyone else and don't put any non-exempt monies in there.

If a judgment is entered, make sure the creditor is aware, when you get served with exemptions, that your funds are exempt and cannot be seized.

Depending on the nature of the debt that is owed and your circumstances, the only real solution may be to resolve the debt. If this is for a credit card and you are relatively young, you might want to save up what you can and settle the debts. On the other hand, if you have no assets, will not need credit and don't care, then maybe you are what is called "judgment proof". In such case, maybe you don't want to pay anything.