Bank set-off question

[oldedude]

What is the name of your state? Kentucky

I have a bank credit card that I may soon not be able to keep making payments on.
I don't have an account with them except that in 1995 my Mother added my name to her checking account that IS with this bank.
She did this in case anything happened to her.
Since then she developed Alzheimers and is in a nursing home, and I pay her bills from her account.
Her only income to this account are direct deposit Social Security and V.A. disability checks.
I do not have Power of Attorny, nor has a court assigned me to handle her affairs.
I don't believe the bank can do a set-off on her account or freeze it legally. but that doesn't mean that they wouldn't try.
My question is what should be my best course of action if they do a set-off or freeze of her funds?
Thanks in advance for any advise.

 

[Ladynred]

If your name is on that account they very well could grab funds from it. Since your mother's sole source of income is exempt and direct-deposited to that account, you need to make sure that the BANK knows that none of that money is yours. What you REALLY need to do is get your name off the account and get a power of attorney so you can handle your mother's affairs.

 

[oldedude]

Ladynred

Thanks for your response.
You said they could grab funds from the account.
Isn't this prohibited by Federal Law?

http://www4.law.cornell.edu/uscode/42/407.html

Sec. 407. - Assignment of benefits
(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.
(b) Amendment of section

No other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section.
(c) Withholding of taxes

Nothing in this section shall be construed to prohibit withholding taxes from any benefit under this subchapter, if such withholding is done pursuant to a request made in accordance with section 3402(p)(1) of the Internal Revenue Code of 1986 by the person entitled to such benefit or such person's representative payee

Of course, even if they can't doesn't mean they wont, which lead me to my question, What if they do?
What would be the proper recourse?

 

[Ladynred]

You are absolutely correct, your mother's source of income is completely exempt - untouchable.

The problem is all a creditor is going to find is YOUR name on an account with money in it - and they'll hit first and ask questions later. That's why I say you should really get your name off that account so that you don't have to wind up fighting to get your mother's money back.

My mother will be 86 next month and is in assisted living, so I well understand the convenience of your name on the account to manage her affairs, but a P.O.A. would be a much wiser way to go, especially if you're having creditor problems.

 

[oldedude]

sage advise Ladynred, thanks.