Tuesday, May 08, 2007

VA Disability? Financial Problems? Direct Deposit? You're Screwed

Supposedly your VA disability payments, along with your Social Security, are secure from garnishment by bill collectors.


But in a case out of Alabama, Mrs. Viola Sue Kell got her bank account frozen while debt collectors garnished her money.

All of which was from Social Security disability payments. Illegal, yeah, but apparently it happens with disgusting -- and alarming -- regularity.

Larry Scott over at VA Watchdog has the full story, and it's not a pretty one.

Banks, who ought to know better, don't tell the collectors that what they are doing is illegal. They just blithely go along with it, apparently because it's such a money maker for them. They can charge a fee -- to the account holder -- of $100 just for putting the garnishment on the bank account. And then, for the unwary customer who goes on writing checks for daily living expenses, they can charge an additional overdraft fee for every check that they bounce.

Jeez, what a cash cow this could be. No wonder they won't tell their customers.

So evidently this is a process that will continue. If you have a VA disability or Social Security payment that is deposited directly into your bank account -- and these days who doesn't opt for that convenience? -- you should be aware that if you have any financial problems that could result in your assets being frozen and garnished, you really need to consider stopping that direct deposit and go back to getting hard-copy checks snail-mailed to you.

It'll be inconvenient as hell, but at least you'll keep getting your money.


Roo said...

farnsworth write me sometime. lets talk 68.

rooloo at gmail dot com

Anonymous said...


Only the poor get the swift justice and jail sentences!

Anonymous said...

yeah, i served 4 years of marine corps and a tour in desert storm and it seems there is not a soul who will give any respect anymore. disrespectful teens, managers who are all for themselves,police who are crooked, i had 16 years of federal service 12 in post office, resigned to relocate to another state and now they wont hire me back.im tempted to move to canada and keep george bush and this country because its not the country i remember giving up years of my life for and thank god it wasnt my life cause lets face it theres still those assholes that dont care!!!! and get these ragheads and illegals back where they belong, in their own country. how stupid and weak our leaders are.they should have hung bush and cheney,theyre no better than hussein!!!!!!!!!!!!

Anonymous said...

SICK of these f...... towelwraps in this country deport em all bring our boys home!

Anonymous said...

I am very angry I am a vet on social security Disability and Bank of America NA just took $100.00 Fee from me plus late fees. I don't plan to take this laying down. According to Title 42 of the United States Code Chapter 7 subchapter II Section 407 (a) "In general
The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law." I am going to request the bank return my $100.00 and request also an audit of my account since I opened it and request a refund of all fees charged to that account since it was opened since according to law I was not able to assign to them the rights to that money or to any future monies. I also will inform them of the Social Security rules which state "Section 207 of the Social Security Act provides: "The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law."

Anonymous said...

I hope my post helps someone. At least the banks will think when they realize we can read the law for ourselves. Yeah for the internet

Farnsworth68 said...

Bison, if that was your anonymous post at 10:26, GO FOR IT brother.
And come back and let us know what happens.
--The F Man

Anonymous said...

This is an eye0pener. Can't believe that is going on. I just received a settlement & was going to sign up for direct deposit. Don't think it would be prudent at this point in time.
Any lawyers out there that can help with this? Sounds like they are flaunting the law and getting away with it. I'm just about to finish a chapter 13 bkruptcy. That's all I would need to go back to war w/ the scum.Viet Vet /Agent Orange /Prostate cancer

MixedStix said...

This is my kinda blog, better than Gov't cheeze. Follows is a true story, the names have been left out, so it will cave them when shit hits the fan.

I am 100% Disabled USMC. Aloso SSDI and State of ND disability payments. Recently a law firm and our bank seized all our moneys over a pending judgement. I informed the law office that since my wife was unemployed and we lived on fixed income and were working with a debt settlement company and that I had no choice but to turn the account over to them. The following day my credit union was served by the firm and "every last penny was taken" I went without vital mental medication for 10 days, not to mention having no money whatsoever to pay the utilities and other payments. I have been told that Federal Diability is untouchable. The credit union's attorneys agreed. Now my wife is working and we requested a loan to pay off another creditor. We were flatly refused even a loan on a 2003 dodge van we own.There have been Federal laws broken here. I have recorded all the events in a secure online vault the day this happened. We want to make a statement, for others. What recourse do we have?

Ok here it is: Lawyer Needed.
( damnit ) Qualities must include: Sleazy, coniving, greedy, stubborn, rude, agressive, willing to make National News, and history on this issue of illegal seizure of $ from Disabled Vets/Americans, not affiliated with good old boy network of the dying old fart generation under which the Corporate entities with $ get over on unsuspecting/UNINFORMED Americans. Further this Lawyer must be in a position to focus on winning our case totally to set a National Precedent. Weak willies and nincomppoops with out backbone stay in your shoes. Must be willing to think LARGE and be paid on Winning.

Is there one of the millions of lawyers out there that can read this page and hear the voices of just this page, then Do large mathematics to take it to the limit? M/F who out there will put their name in the history books and represent the rights of the disabled Veteran/Civilian of America. MORALITY IS A BIG ISSUE< also Federal Law has been broken.

Anonymous said...

hi, i've been reading about credit card companies freezing bank accounts . i get my (deceased) husbands pension from va /navy. can they freez that account and what should i do to stop it. thanks please help

Delphi said...

This is more of same, and simply reflects an increasingly low view of military personnel, as well as a profound lack of understanding of their situation. With the government willing to try to exercise fiscal restraints on the backs of the military, why shouldn't the civilian populace feel free to do so as well?
Example: I am a Navy vet from the Viet Nam era with a 30% disability. I get VA disability payments, and then the same amount is deducted from my retirement pay. Net disability payments: The tax difference on the payments. If the government is willing to do that to its service members, then why shouldn't the rest of the populace pile on in while the money is there?
It's an attitude thing.
There is yet another example of this in the offing, but not yet covered on this blog (I am a newbie here, so if this is a repeat I apologize). Currently there is a Congressional Budget Office report out proposing three options to help control spending. This report can be found at: http://www.cbo.gov/ftpdocs/99xx/doc9925/12-18-HealthOptions.pdf.
Option 96 (on page 175 of the document, page 189 of the PDF file) proposes significantly increasing out-of-pocket copayments by retirees. As the option states, "Under this option,
TFL would not cover any of the first $525 of an enrollee’s
cost-sharing liabilities for calendar year 2011 and would
limit coverage to 50 percent of the next $4,725 in Medicare
cost sharing that the beneficiary incurred."
Option 97 (on pages 176 & 177 of the document, pages 190 & 191 of the PDF file) proposes increasing medical cost sharing for retirees not yet eligible for Medicare. As the Option states, "This option would raise the enrollment fees, copayments,
and deductibles for younger military retirees who wished
to use TRICARE." It also would raise mental health copayments.
Finally, Option 95 (on pages 173 & 174 of the document, page 187 & 188 of the PDF file) proposes, "cost sharing under
TRICARE Prime would be altered to incorporate copayments
that would cover, on average, about 10 percent of
the cost of health care services obtained either at military
facilities or from civilian providers." Just what that E-5 with a spouse and two kids and is eligible for food stamps needs to help his home finances!
Please look at the links and read the options. The most important effort you can make is to contact your congressional representatives (http://www.senate.gov/,http://www.house.gov/) and let them know about you, and enlist their support to block Option 96, Option 97, and Option 95.
By the way, the report was dated 18 December 2008. Merry Christmas from Uncle Sam!

Delphi said...

Add Option 98 to my previous list. That takes care of getting money back from veterans without a disability. As the Option notes, "A rationale for this option is that increased cost sharing for veterans in Priority Group 5 could reduce VA’s spending by making those veterans more cost-conscious in their demand for health care services. An argument against the option is that it focuses on one of the poorest groups of veterans and leaves unchanged the out-of-pocket expense of those in lower-priority groups." Yep! Exactly!
So, whoever wrote this knew exactly what he or she was doing!
This is egregious!

Anonymous said...

there is a cure for all financial problems. don't spend more than you make!

Farnsworth68 said...

Okay, anon. This means that you don't have a mortgage or a car payment, huh?
That kind of advice is right up there with "Don't drink anything you can't lift" and "Never eat anything bigger than your head"...
--The F Man

Anonymous said...

Perhaps this… the protection of your VA disability from alimony?

38 USC 5301 is the protection of VA disability compensation against alimony awards to third parties. Although they contribute to the problem, state court judges, lawyers, and state legislators see only what they want to see. Make judgments according to precedent, the easy route, “stare decisis”, Rose v. Rose, and their misrepresentation of Administrative law, 42 USC 659. Helping this process along is the Veterans Administration policy. Rubber stamping each state court garnishment order without thought or questioning. Disregarding the rules of Compliance With Process procedure. “The governmental entity shall comply with legal process, except where the process cannot be complied with because: ..” The “because” to all this follows.
General counsel Department of Veterans Affairs before the House Committee on Veterans Affairs. Mr. Thompson speaking on the subject at hand states , “The sole exception is that VA compensation received in lieu of waived military retired pay can be garnished in order to satisfy court-ordered child support and alimony obligations.”
VA compensation can be garnished only if two (2) conditions exist, to satisfy court ordered, (1) child support and (2) alimony obligations. The “sole exception” Not one(1), but two(2) conditions.
“The interpretation of the General Counsel on legal matters, contained in such opinions, is conclusive as to all VA officials and employees, not only in the matter at issue, but also in future adjudications and appeals involving the same legal issues, in the absence of a change in controlling statute or regulation or a superseding written legal opinion of the General Counsel.”
“VA monetary benefits, entitlement to which is generally based on either the veteran’s disability and wartime service (pension) or disability from service-connected injury or disease (compensation), is generally not considered remuneration for employment.”

“The test to determine if a payment is subject to garnishment is whether the payment is remuneration for employment as defined in section 459 [42 U.S.C. 659(a) and (h).“You will see that in 659 (V) they are talking about retired or retainer pay where “..the entitlement to which is based upon remuneration for employment”

What have these laws taught us? That disability compensation is not.. retired or retainer pay. Therefore not.. remuneration for employment compensation. That the VA’s mandate ignores compliance with its legal process, and illegally continue to complying, and processing state court ordered judgments outside the guidelines of federal law.

Anonymous said...

The VA deemed my father disable the cause agent orange and decided on a monthly amount plus 5 months of back pay totaling over $30,000. They also deemed him incopetant so someone within is in charge of dispearsing his funds of which they are holding on to the 30k and only giving him a portion of his monthly. He now needs 24 hour care and the VA will not let us use his monthly money they are holding on to. We were also told this money will not go to his estate when he passes which must be why they won't let us use it for his neccessary care.
Who do we contact to dispute this?

Farnsworth68 said...

Anon, you need to contact your congressional representative's office. He/she has a staff member whose job it is to look into veterans' affairs and issues. Start there, and also you might want to contact the Disabled Veterans of America, who have people who are "buddies" with the appropriate VA people who can grease the skids.
Good luck and let me know how this works out for you.
--The F Man

VickyR said...

read the comments about the VA garnishing alimony...we are having a problem with the V.A. illegally doing just that. The court ordered my husband to pay $600 a month which is being accomplished via garnishment of his military retirement check and his CRSC check. Then the VA decided to start their own garnishment of $507 based on an old court order. We faxed the current court order June 23 and now 4 month later, they are still taking the $507 even though they have received all the legal paperwork showing they are breaking the judge's ruling. We have run out of options and it is financially killing us. Any other routes we can go besides the VA help offices (which are no help)?

Farnsworth68 said...

As I stated in the above comment, right now your best angle is your Congressional Rep or your Senator. If you live in an area where they actually give a shit about their constituents. But they are up for re-election in a little more than a year, so they might be more willing to help.
Best of luck to you.
--The F Man

Unknown said...

I can confirm that this happens without hesitation. In my case, it wasn't even 3rd party bill collectors: Navy Federal Credit Union took $2000 from my disability compensation that was direct deposited into my account.

After my financial world fell apart a few months ago I was unable to pay my bills. I'm still in this position, but with a new job coming up at the beginning of the year that will start getting my life back on track. I'm completely without any money at the moment, so when I discovered that my disability check had been taken by Navy Federal Credit Union immediately after it was deposited I was very disappointed.

It's hard enough to swallow my pride and ask people for money, swiping my disability compensation is a blow below the belt.

To top that off, I can't get through to the compensation office to change my direct deposit information. "The call center is too busy to take your call, please call again later" is the only message that I ever get.

Anonymous said...

We have no number to call to rectify a VA disability direct deposit issue...the bank screwed up and sent it back to VA because of a merger and account numbers got mixed up....bank can't do anything and all the VA numbers we called tell us "we don't handle that" ...help!! Sundbladhsu@yahoo.com