NY’s New Exempt Income Protection Act Explained

Empire Justice Center

New Protection Against the Garnishment of Exempt Funds:  The Exempt Income Protection Act

By Gina Calabrese and Kirsten Keefe

On September 26, 2008, Governor Paterson signed into law the Exempt Income Protection Act (“EIPA”), Chapter 575 of the Laws of New York, 2008.  Effective January 1, 2009, the law sharply limits judgment creditors’ ability to restrain bank accounts containing directly deposited Social Security and other exempt funds.  EIPA also prevents the first $1,716 of any account from being restrained and creates special procedures that, in most cases, will enable an accountholder to have their account released without the aid of an attorney and without going to court.  It is expected that the law will virtually eliminate the problem of restrained bank accounts for low-income New Yorkers.  Consequently, legal service providers should see a steep decline in the number of requests for assistance with frozen bank accounts.  This article discusses the changes that EIPA makes to the law governing restraining notices imposed on individuals’ bank accounts.

Read this excellent article in its entirety here–scroll down to page 10

Check out the flow chart at page 13.