Has Anyone Had a Fidelity Checking Account Frozen by a Creditor? NY- Do They Follow State Levy Laws?

[stuckincustoms]

I have lost my job a few months ago, got behind on bills and racked up a few judgements (one from an eviction). My only money is my unemployment that is direct deposited into my Fidelity Checking account. I have a a small (its being rapidly depleted to pay bills) IRA with Fidelity.

I know in NY the law is that about $2500.00 of money in a checking account is protected from levy's if its direct deposited unemployment. Here is my concern; Fidelity is not a bank, its a brokerage. Also, Fidelity uses various clearing banks across the country to hold funds. So with this in mind, is the money in Fidelity still covered under New York's garnishment and levy laws?

[tmcgill]

I've been told that it is a longer process to levy IRA funds, and there are more steps than getting a regular judgement.

Usually, this is done by the IRS to satisfy unpaid taxes. I would check with an attorney licensed to NY to verify.

[stuckincustoms]

I've been told that it is a longer process to levy IRA funds, and there are more steps than getting a regular judgement.

Usually, this is done by the IRS to satisfy unpaid taxes. I would check with an attorney licensed to NY to verify.

I know that IRA retirement accounts cannot be levied upon by creditors in NY. Im not talking about those. Im referring to the MYSmart Cash Account that Fidelity offers Its a checking account. I get my unemployment money direct deposited in there

[virtualtreasure]

Is it still an option to switch to paper check, may want to play it safe until the dust settles.

 

[T77125]

From what I understand if you are receiving any type of aid, state or federal that it can not be levied. Pensions can not be taken either. The bank is supposed to check what types of deposits are entered before freezing the account. If it does become frozen go to the bank and demand they unfreeze it and threaten to sue them.

[T77125]

Is it still an option to switch to paper check, may want to play it safe until the dust settles.

 

That's ok if he can just cash it and go. Which usually is the case. But if it's direct deposit the bank statement will say where the check came from.

[tophie]

I think that only judgement are valid in that state they are issued in, so is there a Fidelity in New York? Have you considered using E-Trade? They don't use Chexsystems.

[stuckincustoms]

I think that only judgement are valid in that state they are issued in, so is there a Fidelity in New York? Have you considered using E-Trade? They don't use Chexsystems.

Fidelity is probably identical to E-Trade. Im sure E-Trade uses clearing banks to process their accounts also. Fidelity has "investment centers" in NY similar to E-Trade. Fidelity uses about 5 different banks to clear funds. UMB, Citibank, Suntrust.

Would the restraining order instruct the bank as to what funds are exempt?