Since 2012, the funds in the account can only be protected from creditors through the P-account.
So what’s the idea behind this?
An exemption limit applies to earned income. Similarly, Hartz IV benefits, payments such as parental leave benefits or unemployment benefits, and other social benefits are exempt from garnishment. A problem always arose when these payments were credited to the account. Then the claims that were originally protected from garnishment turned into bank balances. However, bank balances were not protected from garnishment.
In the past, one could only secure the minimum subsistence level by withdrawing social benefits in a timely manner or by obtaining release orders from the local court in each individual case. That is over. This option no longer exists.
Instead, there is now the P-account.
Who can apply for a P-account?
Anyone can apply for a P-account. The bank or savings bank is obligated to convert the checking account into a P-account. Joint accounts cannot be maintained as P-accounts.
Anyone can apply for a P-account, regardless of income or assets.
Recipients of social benefits should definitely consider opening a P-account.
A P-account is a must for anyone who already has an active garnishment, has dormant garnishments, or expects to be at risk of garnishment in the future.
What if the account has already been garnished?
Even then, all is not lost. If the account is converted into a garnishment-protected account within four weeks of the bank receiving the garnishment order, you can regain access to the garnished amount up to the exemption limit. The bank is obligated to convert your account to a P-account within four business days of your request. If these deadlines are met and you haven’t wasted any more time, you can still save the garnishment-exempt amount by submitting a quick request to your bank.
The conversion of a checking account into a P-account is recorded by credit bureaus and viewed negatively. This can lead to a reduction in your creditworthiness.
Banks are not allowed to refuse the conversion to a P-account. In some cases, there have been issues with increased costs for a P-account. Some banks have started to cut back on services during the conversion. This is likely not permissible. For now, the customer has no choice but to find another bank. Numerous institutions offer their favorable terms for P-accounts as well.
Garnishment protection for everything?
Only the garnishment-exempt amount is protected in the P-account. This is at least a base amount of €1,559.99 per month. For each person obligated to pay support, this base amount increases according to the garnishment table.
If you leave a portion of the balance in the account each time, a balance may accumulate over time that exceeds the garnishment-exempt amount. This saved amount is then generally not protected from garnishment. An exception applies only to balances carried over to the next calendar month that resulted from your not having spent the entire garnishment exemption amount in the previous month.
Balances saved in the P-account over a longer period of time are subject to garnishment.
A certificate for opening the P-account is only required for those who have maintenance obligations and can therefore have a garnishment exemption amount higher than the base amount of €1,559.99 protected.
The base amount can also be increased if social benefits are deposited into the account.
If you're dealing with bureaucracy, paperwork, or just not sure where to start, please contact us. Just let us know how we can help. We're here for you and ready to work together to find solutions.
