Freeze on IRA account

[comathon]

What is the name of your state?New York State
I'm a senior citizen & I had a problem with a contracter( I won't go into detail, for it would be a long letter.) I refused to pay him, & he placed a judgement on me in 2001. I just received a letter from the bank, that they are restraining my account for double of the money I owe him & charging my account $100.00. for processing. This account happens to be my IRA retirement account. I was told several months ago by the Bank Manager that they can not touch my IRA account. I would appreciate any information any one can give me on this legal problem.Thank you.

[Debt Guy]

IRA accounts are not subject to attachment by a creditor.

I suggest you contact the court clerk and explain about the "freeze" on your IRA which is an exempt asset. Ask what type of paperwork needs to be filed with the court in order for this the be released. In some states, that paperwork is called a list of exemptions.

[comathon]

New York State- Thank you for your fast reply. I also have a checking account at the bank. I had only approx: 20.00 in the account until I deposited 2 checks for $100.00. They also put a freeze on the checking account & the bank charged my checking account a processing fee of $100.00. What I noticed, the restraining order was dated June 28, 2005, & the restaining order wasn't put on my account until 10/17/05. I feel they were waiting for me to make a deposit. Will they be required to reimburse be for this fee? Do you know if the following are Attorneys or a collection Agency? Law Office of Paul J. Hotten & Associates- 5505 Nesconset Highway- Mt. Sinai, NY 11766. Thank you so much for taking the time to write to me.

[Debt Guy]

The checking account is fair game.

I don't know if they will refund the processing fee. Probably not.

Sounds like a law firm to me.

[comathon]

I live in New York State. I went to the Court House with the information that you gave me. No one seem to know the answer. I went to the bank, the manager called their Legal Dept. They claim they can freeze my IRA account. What I'm looking for, where on the internet can I get subjects on exemption for IRA's. I plan on returning to the Bank, with as much back up information as possible. Thank you for your time.

[Chien]

OP - I can give you the authority, but I can't give you a single working link to the source. This is so New York. Maybe you'll have better luck.

The authority is New York Civil Practice Law and Rules sect. 5205.

In a bankruptcy court ruling on a claimed IRA exemption, the court stated:

"Non-rollover individual retirement accounts (IRAs) are exempt from being applied to creditors' claims. This was established through an amendment of Section 5205 of the New York Civil Practice Law and Rules (CPLR). IRAs are retirement plans established by a corporation for its employees. Such plans qualify under Internal Revenue Code Section 408, which lists them as personal property and, thus, come under CPLR 5205. The latter lists personal property that may not be seized to satisfy a money judgment against the owner in case of death or bankruptcy. These items include clothing, household furniture and appliances, books and other property. However, non-rollover IRAs are not exempt in the following cases: when they qualify under a qualified domestic relations order, when the IRS enforces a judgment for tax delinquency, and when they are made within 90 days of the claim."

Concerning levies, the New York City Marshal's Handbook of Regulations states:

"CPLR §5205(d) provides that income from certain sources is exempt from garnishment to satisfy a money judgment except as specifically ordered by a court. Payments made to a judgment debtor from certain individual retirements accounts (IRA), or part of a Keogh (HR-10), retirement, or other qualified plan of the kind specified in CPLR §5205(c)(2) are exempt. Marshals are advised to consult these sections carefully before attempting to levy on income from trusts, custodial accounts, annuities, insurance contracts, monies, assets, or interests that may have been established as part of such a plan.

Hope that helps.

As to the rest of your post, I think there may have been some miscommunication.

I went to the Court House with the information that you gave me. No one seem to know the answer.

Court employees aren't allowed to give out legal advice of this nature, even if they do know the answer.

They claim they can freeze my IRA account.

They have to freeze your bank account, when they have a court order to do so. It's your job to then claim exemptions for the funds in the account.

[comathon]

New York State-I went to the bank today, that has the freeze on my IRA account. She called their Legal Dept. They stated that I would have to call the creditors Attorney in order to get a release. I called the office & the women who answered, stated that it was in the hands of the New York Marshall & for me to contact him. Can someone advise me on this matter. Thank you for your time.

[Chien]

They stated that I would have to call the creditors Attorney in order to get a release. I called the office & the women who answered, stated that it was in the hands of the New York Marshall & for me to contact him.

OP - I stand behind the information that you've been given. That included the advice that you must claim exemptions because, if you don't, no one is expected to know that the money is exempt.

The creditor's attorney could take your word for it, and, if she/he did, the attorney can release the funds without proof that they are exempt. That's done by giving instructions to the Marshal. Only the attorney can do it, and that assistance is voluntary. Someone at the attorney's office has chosen not to help and has thrown you back to the Marshal.

I suggest that you try again to contact the attorney and see if you get a more helpful soul. I would also suggest that you promptly go directly to court and file what is called a Claim of Exemption. This is the more traditional way to exempt assets, and you will need this in place, if they again choose not to help you. Besides, the attorney will get notice of the Claim and may become a believer.

[Ladynred]

NY Consolidated Laws used to be readily available on the NY Assembly site. They have apparently moved the laws to another site.

Here's a link to Section 5205 as quoted:

http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$CVP5205$$@TXCVP05205+&LIST=LAW+&BROWSER=22163082+&TOKEN=589 27376+&TARGET=VIEW

[comathon]

Thank you for everyone that answered to my problem. I sent them the information they requested, & they are going to lift the freeze on my IRA account. I also discussed with them, that I plan on vacating the judgment. I have never down this before, & have no knowledge on how to proceed. This is a small village & the Judge in this case was a former contracter . I wasn't treated fairly the first time & feel I wouldn't be treated fairly if I should return. I would like a change in Venue, & wonder if this is possible. I have the defective part that the contracter sold me. Any advice would be greatly appreciated. Thank you for your time.