Stop Bill Collectors!

Debt collection agencies use every technique they can to collect judgment. They’re like The Terminator: they have one goal, and that is to collect. They will use every technique allowable by law (and sometimes, ones that are illegal), top con, trick, coerce, and cajole you to giving up personal information. While you should not ever talk to a bill collector (sure, go ahead and call once, to see if they are being reasonable. Trust me, they’re not going to be). But in order to really deal with debt collectors you’ll need to know how they operate. Here’s the top ten tricks they use to get you to divulge your security number, which they will use to find hidden assets and report you to the credit bureaus.
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Utah is not debtor friendly. Exemptions (those items you can keep if you get sued in court) include a tiny $20,000 dollar amount for your primary home. In other words, if you have more than $20,000 in equity in your home and a collections agency gets a judgment against you, you will most likely be forced to sell you home. Utah is a little bizarre in that (unlike most states), it lists the specific items you can keep, like one microwave. So if you’d rather keep that nice digital camera, too bad. If you get a judgment against you, your creditor will most likely force you to sell it.
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West Virginia is one of the states you don’t want to be sued in. As well as a paltry homestead exemption, they also allow judgments creditors to take your life insurance cash value. I knew an elderly man (I’ll call him Roy), who lived in Grafton, WV on a small retirement in a modest home. A neighbor stepped on his beagle, Bessie’s, tail. Bessie bit the neighbor (barely breaking skin). The neighbor won a judgment for $250,000 and Roy lost his home and was forced to cash in his life insurance policy. A year later, Roy passed away and his wife was left with nothing. Roy (and his wife) lost his home and his entire life savings because his neighbor stepped on his dog’s tail. If you are on the receiving end of a judgment, you don’t want to live in Virginia: they allow anyone with a judgment in hand (like credit card companies) to clean you out.
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Unfortunately, Virginia is one of those states that isn’t very friendly toward debtors. The laws and exemptions tend to favor the credit card companies when it comes to judgments. In addition, the law also favors householders: if you ar enot a householder, your creditors can take all of your personal property (you cannot claim any exemptions). Unlike Florida, where your home is safe from creditors, Virginia law allows a creditor to force the sale of your home. Your best bet if you live in Virginia and you have equity in your home? Fool your creditors into thinking you live elsewhere.
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Tenancy by the entirety is a tool you can use to outwit debt collectors. It allows a husband and wife to own property together as a single legal entity. Why should you care about this legal tool? Because judgment creditors for either party cannot put a lien against your property. That means if you own a debt (and not your spouse), the creditor cannot touch a penny of any interest you have in a tenancy by the entirety item.
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The law in Wisconsin is clear: if a creditor obtains a judgment against you, you must claim (“affirm”) your right to the following list of exemptions. If you do not, your creditors can sell the item out from under you and take the proceeds (they will be nice enough to mail a check to you for the difference). The following list of exemptions are items that you can keep safe from creditors who have judgments against you, as long as you file the proper claim for with the court. You can also keep the items if you go bankrupt. There are very specific laws in place regarding life insurance policies: if you have one, or are the beneficiary of one, you should contact a lawyer who will be able to tell you if the proceeds or cash value are exempt.
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Exemptions are those items you would be allowed to keep should your creditor obtain a judgment against you. If you own an item that is worth more than the listed amount, you’ll either have to sell the item or you will have to pay your creditor the difference. Washington makes an important exception for spouses: in a lot of states, you and your spouse can both take an exemption. Not so in Washington, where you cannot double the homestead exemption. Child support obligations are also an exception, and you may lose your exemptions (including homestead and retirement) if you owe child support.
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Wyoming has one of the oddest list of state exemptions for judgments and bankruptcies. I did live next to Wyoming for a while (in Northern Colorado), and it is a pretty desolate state. So I guess it stands to reason that in Wyoming, your creditors can take your house but they can’t touch your liquor license. There’s also no dollar limit on bibles and family pictures, so if you want to avoid your creditors in Wyoming, forget the notion of “your house is your castle” and invest in liquor licenses and a bible collection.
• Homestead: up to $10,000 (Trailer, up to $6,000)
• Pensions/retirement/IRA: exempt
• Bank account: NO exemption (they can take every penny)
• Car: up to $2,000
• Bedding, furniture, household articles & food: $2000 per person in the house
• Bible, schoolbooks & pictures: exempt, no dollar limit
• Burial plot: exempt, no dollar limit
• Clothing & wedding rings: up to $1000
• Funeral contracts, pre-paid: exempt, no dollar limit
• Motor vehicle to $2000
• Insurance: Annuity contracts up to $350/month
• Disability benefits: exempt with no dollar limit (only if clause prohibits proceeds from being used to pay creditors)
• Fraternal benefit society benefits: exempt, no dollar limit
• Group life or disability policy or proceeds: exempt, no dollar limit
• Life insurance proceeds held by insurer: exempt, no dollar limit (only if clause prohibits proceeds from being used to pay beneficiary’s creditors)
• Public assistance: exempt, no dollar limit
• Crime victims’ compensation: exempt, no dollar limit
• Unemployment compensation: exempt, no dollar limit
• Workers’ comp: exempt, no dollar limit
• Tools of the trade: $2,000

If filing bankruptcy, you can’t take the federal exemptions: you must choose the state exemptions.

If a creditor wins a judgment against you, they can force you to sell your belongings. The following list is a general list of items you can keep if you are a resident of Colorado. If an item is listed as “exempt” with no dollar value next to it, that means a judgment creditor cannot attach or garnish that item, no matter how much it is worth. An important fact to note in Colorado is that if you claim bankruptcy, you are not entitled to federal exemptions. You must choose the state exemptions.
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You can think of California as the opposite of Florida. While Florida has liberal laws to protect consumers, that state favors creditors. If you are unlucky enough to be sued in Cali, you won’t be left with much. For example, creditors can tap into your social security benefits: something that is prohibited in many other states. There is a provision in the law for a cost of living increase, but that’s little solace to you if you’re having to turn over a portion of your retirement check over. My advice if you are being sued for a debt in California? Move.
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