The garnishment rule only protects federal benefits as defined by 212.2(b)
(b) Funds. Federal benefit payments protected from garnishment pursuant to the following authorities:
(1) SSA benefit payments protected under 42 U.S.C. 407 and 42 U.S.C. 1383(d)(1);
(2) VA benefit payments protected under 38 U.S.C. 5301(a);
(3) RRB benefit payments protected under 45 U.S.C. 231m(a) and 45 U.S.C. 352(e); and
(4) OPM benefit payments protected under 5 U.S.C. 8346 and 5 U.S.C. 8470.
The federal rule does not protect payments made from a state. You should confer with legal counsel to determine if there are additional requirements for protecting state benefits under state law.
For example, in Illinois, although state retirement funds are excluded, the law requires that the bank still hold the funds and it is up to the judgment debtor to petition the court to release the funds back to them.
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