Consumer Law

New York Exempt Income Protection Act Enacted

By Jeff Sovern

On Friday, September 26, Governor Paterson signed into law New York's Exempt Income Protection Act.  Some payments, such as certain Social Security benefits, are immune from seizure by debt collectors.  But some debt collectors had found a way to get around the exemption by sending a restraining notice to the bank where the consumer maintained the funds.  Some banks responded to these notices by freezing the bank account, preventing consumers from obtaining the funds until they had gone through a time-consuming and expensive process.  The statute provides that the first $2,500 in an account that contains directly-deposited exempt funds cannot be frozen.  My St. John's colleague, Gina Calabrese, helped secure passage of the statute.

Full post as published by CL&P Blog on October 03, 2008 (boomark / email).