Short answer: if a creditor gets a garnishment order against you and your bank account received certain federal benefits by direct deposit in the last two months, a federal rule says the bank must look back over those two months and leave you the lesser of the benefits deposited in that time or your balance. You do not have to file anything to use that protected amount. Money above it can be frozen, and benefits you got by paper check are not part of the automatic review, so you may need to claim an exemption in court. This is general information, not legal or financial advice.
Which benefits the automatic review covers
The rule, 31 CFR Part 212, applies to federal benefit payments from four benefit agencies: the Social Security Administration, the Department of Veterans Affairs, the Office of Personnel Management and the Railroad Retirement Board (31 CFR 212.2(b) and 212.3, eCFR, text up to date as of October 28, 2026, read October 30, 2026). The model notice in the rule lists them as:
- Social Security benefits
- Supplemental Security Income benefits
- Veterans benefits
- Railroad retirement benefits and Railroad Unemployment Insurance benefits
- Civil Service Retirement System and Federal Employees Retirement System benefits
The rule protects these only when they were paid “by direct deposit” and carry a code that lets the bank spot them (212.3, eCFR). Treasury Fiscal Service says the bank can see that code in its systems and on the account statement (Treasury Fiscal Service, last updated March 15, 2026, read October 30, 2026).
The CFPB lists more federal money that is protected when it is direct deposited, including servicemember pay, military annuities and survivor benefits, federal student aid and FEMA assistance (CFPB, last reviewed October 28, 2026, read October 30, 2026). Those are outside the four benefit agencies, so the bank’s automatic two-month review does not cover them; you may need to claim them as exempt through the court.
What the bank must do when it gets the order
| Step | What the rule says |
|---|---|
| 1. Check for a federal notice | Within two business days, the bank checks whether a federal agency or a child support enforcement agency attached a “Notice of Right to Garnish Federal Benefits”. If one is attached, the bank follows its usual procedures and the two-month protection does not apply (212.4, eCFR). |
| 2. Review the account | Within two business days of getting the order and enough information to find your account, and before anything else that affects your money, the bank checks whether a benefit agency deposited a benefit payment in the lookback period (212.5(a) and (e), eCFR). |
| 3. Set the protected amount | If it did, the bank must “immediately” set the protected amount and give you “full and customary access” to it. You have “no requirement to assert any right of garnishment exemption” first (212.6(a), eCFR). |
| 4. Send you a notice | If money above the protected amount is frozen, the bank must send you a notice within 3 business days of the review (212.7(a) and (f)). |
The lookback period is the two months before the day of the review. The protected amount is “the lesser of the sum of all benefit payments posted to an account” in that period, “or the balance in an account when the account review is performed” (212.3). The bank reviews each of your accounts separately and may not trace money you moved from one account to another (212.5(f)). The review is done the same way even if other money is mixed in, the account has a co-owner, or the order says otherwise (212.5(d)).
What the review does not cover
- Benefits paid by paper check. The CFPB says if you deposit a benefit check yourself, the bank does not have to protect two months of benefits, your whole balance could be frozen, and you would need to go to court to show the money is protected (CFPB).
- Money above two months of benefits, such as savings from older deposits. The bank follows its usual procedures for that money, which can include freezing it (212.6(d)).
- Orders with a Notice of Right to Garnish Federal Benefits from a federal agency or a child support enforcement agency (212.4(b)).
- Tax levies from the IRS. Treasury Fiscal Service says they are not subject to the rule (Treasury Fiscal Service).
The rule does not end your other rights. It says nothing in it limits your right under federal law to claim “a further exemption from garnishment for funds in excess of the protected amount” (212.8(a), eCFR). The CFPB says SSI is protected from garnishment even for a government debt or child or spousal support, while Social Security can sometimes be garnished for those (CFPB).
How the protected amount works, only for the math
This example is only for the math, and all figures are example figures. You get $1,100.00 a month in Social Security by direct deposit, and two deposits posted in the lookback period: $1,100.00 x 2 = $2,200.00.
| Balance on the day of review | Protected amount (the lesser) | Money the bank handles under its usual procedures |
|---|---|---|
| $3,000.00 | $2,200.00 | $3,000.00 - $2,200.00 = $800.00 |
| $1,500.00 | $1,500.00 | $0.00 |
If those same benefits had come by paper check, the automatic review would protect nothing, and you would have to claim the exemption yourself. The rule’s own Appendix C works through the lookback period and the protected amount with dated examples (eCFR).
Fees on a garnished account
The bank “may not charge or collect a garnishment fee against a protected amount”. It may charge one up to five business days after the review only if non-benefit money is deposited in that time, and the fee may not be more than that money (212.6(h), eCFR). The bank also may not keep garnishing money deposited after the review unless it gets a new or different order (212.6(g)).
What to do after a freeze
- Read the bank’s notice. The rule says it must name the creditor, the protected amount, the amount frozen, any fee, and your right to claim a further exemption by exemption claim forms, the court or the creditor (212.7(b)).
- Use the protected amount as you normally would. The rule’s model notice says “There is nothing else that you need to do” to keep it safe.
- If frozen money also came from protected benefits, the CFPB says to tell the court, the bank and the creditor at once in writing, and to get help from a lawyer (CFPB). It offers a sample letter you can adapt.
- Look for free legal help through Legal Services Corporation, or the Eldercare Locator at 1-800-677-1116 (ACL).
- Keep copies of your benefit deposit records, bank statements and every notice.
The CFPB also says a debt collector must first sue you and win a judgment before it can get a court order to take Social Security or VA benefits from your account (CFPB). If you were sued, see your rights with a debt collector. If you get benefits by check, the CFPB says you can sign up any time for direct deposit to a bank account or prepaid card.
Related guides
For a card debt that turns into a bank account garnishment, see credit card debt and your bank account. Paychecks follow other limits; see wage garnishment for an unpaid loan. Federal debts can be collected another way, covered in tax refund offset for a debt. If you borrow on benefit income, see a personal loan on Social Security income.
Questions to ask your bank
- Did you find federal benefit deposits in the two months before your review, and what protected amount did you set?
- Was a Notice of Right to Garnish Federal Benefits attached to the order?
- How much was frozen, and was any fee charged? Was it taken from non-benefit money?
- When did you send the notice, and to which address?
Checklist
- Direct deposit of Social Security, SSI, VA, railroad or federal retirement benefits gets the automatic two-month review.
- Protected amount: the lesser of two months of those deposits or your balance on the day of review.
- No form needed to use the protected amount; no garnishment fee may come out of it.
- Paper checks and older money: claim the exemption through the court, in writing, with a lawyer or legal aid.
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Sources
- eCFR: 31 CFR Part 212, Garnishment of accounts containing federal benefit payments (sections 212.2, 212.7, 212.8 and Appendix C), current text up to date as of October 28, 2026
- 31 CFR 212.3: definitions (benefit agency, benefit payment, lookback period, protected amount)
- 31 CFR 212.4: initial action upon receipt of a garnishment order (Notice of Right to Garnish Federal Benefits)
- eCFR: 31 CFR 212.5, Account review (Garnishment of accounts containing federal benefit payments), current text up to date as of October 28, 2026
- 31 CFR 212.6: rules and procedures to protect benefits
- CFPB: Can a debt collector take my federal benefits, like Social Security or VA payments? (last reviewed October 28, 2026)
- Treasury Fiscal Service: Garnishment of Accounts Containing Federal Benefit Payments, Frequently Asked Questions (last updated March 15, 2026)
- Legal Services Corporation: Find legal aid
- Administration for Community Living: Eldercare Locator
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.