11.4.3.5 Bank Accounts

If the federal government is proceeding under the Federal Debt Collection Procedures Act (“Procedures Act”) to collect criminal justice debt, the debtor has a choice between the bankruptcy exemptions and a combination of state exemptions and non-bankruptcy federal exemptions.¹⁹³ These protections may allow the debtor to exempt some amount of funds in a bank account. In addition, the general rule that Social Security benefits, veterans benefits, and certain other benefits retain their exempt status upon deposit¹⁹⁴ will apply, as neither the statutes protecting those benefits nor any criminal justice statutes deny that protection in the case of criminal justice debt. A federal regulation requires banks to give automatic protection to certain of these benefits for sixty days.¹⁹⁵

However, the rules are different for collection of federal fines and restitution. The federal statute that governs enforcement of those debts does not provide any protection for Social Security or SSI benefits—whether before or after deposit¹⁹⁶—and its protection of unemployment compensation, workers’ compensation, service-connected disability payments, and job training assistance is limited to benefits that are “payable.”¹⁹⁷