Stop Bill Collectors! » Bank account garnishments

How to Stop a Debt Collector From Freezing Your Bank Account

Janice — Wed, 10 Feb 2010 15:51:04 +0000

When you don’t pay your bills on time, don’t respond to the calls from the collection agencies, and live under cover, you could wake up one day to find your bank account temporarily frozen. That will be a bad day if it’s the day your rent or mortgage is due! You may have missed the judgment notices in the mail (or maybe you moved). You may not even know your creditors went in to court and sued you. You have no idea they got a judgment against you and used it to empty your account. When the creditor follows legal procedures, your account may not be garnished immediately. Instead it might be temporarily frozen.

You won’t be able to get any money from your bank account, but can make deposits into it (as if you would want to). This has a major impact if you write checks for all your payments, because once your account gets frozen by a court, the checks will start to bounce. What you want to know is how to stop a debt collector from freezing your bank account in the first place. Take calls from credit collections agencies as a warning sign and do the following to stop or avoid your bank account getting frozen by a court order.

1. Make small payments towards the debt. Even if it’s $10 a month, it might be enough to stop them suing you. (Think about this, would you rather send them $10 a month or wake up one day to find your account frozen?).

2. Ask the debt collections agency to validate your debt. Do this multiple times: it’s a great weapon that can get your debt cleared. Just send a letter to the agency asking them to validate the debt. That’s it.

3. Stop using your checking account. This is the ONLY certain way to stop a creditor freezing your account, if they have a judgment against you.

Remember: be proactive! If they have a judgment and have already frozen your account, it’s too late to hold onto your money.

*http://www.stopbillcollectors.us/articles/how-to-avoid-being-sued-by-your-creditors
*http://www.indianajustice.org/Data/DocumentLibrary/Documents/1053360095.22/do c_0105bank%20seizure.pdf

How to Fight a Bank Account Garnishment

Janice — Mon, 08 Feb 2010 16:54:18 +0000

Garnishing your bank account is the final step that a creditor would try against you to recover a debt. In the process of bank account garnishment, the creditor has to obtain a legal order from the court to freeze your bank account and take away your money to satisfy a judgment. Unlike laws that protect your wages, there are no laws to protect your bank account: creditors can take all the money in your account if they have the right forms from the court.

There are several possible ways you can keep your money safe, even when you are holding a huge amount of outstanding debts.

Keep your bank account empty, so that the garnishment won’t have any effect: if there’s no money in your account then there’s no money for the creditors to take away.
Request that your employer provide you with paper checks instead of direct depositing checks into your bank account. Cash your paycheck at your bank instead of depositing it. One thing you have to keep in mind is you will then have to pay your bills by using money orders. If you keep money in your bank account and write checks, creditors could garnish the checking account before the checks are paid. You could find yourself in court answering for a number of bounced checks. And, believe it or not, district attorneys don’t accept the defense that a shady bill collector emptied your account and caused you to bounce your checks.
If you earn exempt funds like social security or disability, set up an exemption bank account. By doing this you will have the law on your side to protect the money in your account, as this requires filing of an exemption with the court. These are very nearly never granted: social security and disability are protected in almost every state.
Open a bank account in a different state. There is a fair chance of the creditors tracing this new account of yours and eventually emptying it. But this won’t occur overnight, as they would have to deal with the courts in a different state and go through their set of exemptions and rules. If you don’t owe a huge amount, the creditors may not find it worthwhile to pursue you in another state.
Perhaps the best way to protect your money from getting garnished is, to open an offshore bank account and save all your money in it. It is 100% legal and is being utilized by individuals and organizations across nations to safe guard their assets. Just make sure you report any dividends or interest earned to the Internal Revenue Service (IRS).

How to Stop Garnishment of Bank Account

Janice — Mon, 08 Feb 2010 15:39:00 +0000

It is a terrible feeling once you realise that the money you had in your bank account is now gone. What’s even worse is realising that this can be done legally and the bank will let it happen. This is because your creditors, once they have a court order against you, can take the funds from your bank account as a way of recovering the debt you owe them. In this instance, your bank is powerless to protect your money.

Your options:

Check out the options available to you in your state of residence. Some states will allow you to open a special bank account that is exempt from creditors (“an exempt account”). This means that creditors cannot touch the funds you have in this account.
Another thing you can do is cancel the direct deposit of any income into your bank account. Consult with your employer or clients (if you own a business) and have them pay you either by check or cash. Granted, it is a bit archaic, but at least you get peace of mind by having your money safe in your hand at the end of the day. Your creditors cannot withdraw funds that aren’t there in the first place, so dealing in cash is a good way to stop garnishment of a bank account.
The last option available to you is to open an account in another country. This is called offshore banking and there are many overseas banks that accept United States citizens and even deal in US currency. The benefit of this bank account is that you still have access to your funds via online banking and your creditors can’t touch funds that are outside the United States – so your money is safe.

There is nothing worse than discovering that your bank account is empty, especially when you are getting paid and you know the funds should be there. It does feel like a gross violation of privacy on the part of your creditors, but it is avoidable by following the above steps.

How to Avoid Checking Account Garnishment

Janice — Mon, 08 Feb 2010 15:33:09 +0000

One of the most disturbing things that can happen to you is to have the money disappear from your checking account. What’s even more disturbing is that your creditors – the people you owe money to – are able to legally take the funds from your account, without notice to you, once they have filed a judgment against you and obtained a court order. Of course, you are within your legal rights to fight the matter in court, against your creditors, to get your money back. But if that creditor has a judgment in hand, you will surely lose.

This will cost you a pretty penny in legal fees and you might ask yourself the question – can you really afford to rack up more debt in legal fees to get a few thousand dollars back? Of course, this doesn’t make sense, especially when the reason your checking account is being emptied in the first place is because you have unpaid debts! What does make sense is to avoid this horrible situation in the first place.

In some states, you are able to set up an exempt bank account. This is a bank account that creditors cannot garnish. Your bank will be able to tell you if you can set up an exempt account. It can be a complex process, but it is one way to avoid checking account garnishment.
Stop all direct deposits into your checking account. Instead, organise with your employer to pay you the old fashioned way – by check. You can then go and cash this check, and have money in hand. Whilst it is a bit of a hassle to reorganise how your employer pays you, it is worth it so that you can assume control over the money you receive.
Another possibility is opening an offshore bank account. This is a perfectly legal way of making sure you avoid checking account garnishment as creditors in the United States are unable to access funds in bank accounts outside the country.

No one likes the idea of having their checking account emptied by their creditors. Don’t bury your head in the sand: if you can’t afford to pay your creditors, make sure you judgment proof your assets (and that includes your checking account!).

What Type of Bank Account to Open to Avoid Garnishment?

Janice — Mon, 08 Feb 2010 15:05:46 +0000

A garnishment on your bank account can be quite upsetting as it means that you have no control over the money in your account and you may not be able to pay your bills. It also means that a creditor will be able to take money from your account regardless of whether it is protected or not, and your bank will let them do this because the law says that a bank must always comply with a creditor claim or they will be liable. However, there are ways in which you can protect your assets from garnishment.

There are a few things that you can do in order to avoid garnishment from happening to you.

Open up an exempt bank account. This is a bank account which you can open if you have exempt income such as disability or social security.
Open up an account with a bank in a different state. This will then slow down any creditors who are after you. However it might not stop them totally. If you do this, then try not to write out any checks on this account because they are easy to trace (use your debit card instead).
Open an offshore bank account. If you open an offshore bank account, then any creditors in the US will be unable to touch your money. These types of accounts are very easy to open and they work just the same as a normal bank account; however, it will mean that you will have to do most of your banking on the internet. Contrary to popular belief, an offshore account can be opened up by just about anybody and it is totally legal and untouchable by US creditors!

How do Creditors Find Out if you have opened a New Bank Account?

Janice — Mon, 08 Feb 2010 14:34:39 +0000

When you are in debt, it can be very easy to make mistakes and one of the biggest mistakes that a lot of people do when they are in trouble is to keep quiet and ignore their creditors. If you stick your head in the sand, your creditors may be able to find and access your bank account and take your money without your knowledge or permission. Imaging waking up one morning and finding your bank account emptied!

So just exactly how do creditors find out if you have opened a new bank account?

ChexSystems or Telecheck. If you’ve ever written a check in a store, or opened a bank account, the odds are about 99% that your application (or electronic check) went through ChexSystems or Telecheck. You’re in their database, and that means your creditors can just send a copy of the judgment and Chexsystems/Telecheck will fork over your bank account details.
Creditors can go straight to the courts. A judge can order a “discovery” for you to hand over your bank account information (and he’ll stick you in jail if you don’t comply).
They call your old landlord, your car repair shop, your kids’ school, your employer (or past employer) your credit card company, anywhere that you might have written a check or provided a bank account number. With a judgment put in front of them, just about anyone will turn over that information.

If (and when) your creditors do find out who you bank with, there is nothing to stop them from recovering any monies owed to them by filing for a garnishment through the courts.

What a lot of people do if they are in financial trouble is open up a new account with a different bank and shift their money around. While this is a good temporary way of protecting your money, it will catch up to you in the end.

If you are faced with garnishment, you may have no option but to arrange a payment plan. Most companies will allow you to pay off your debt over time with a minimum payment. Your other option is bankruptcy which will erase all of your debts. Neither of those a good option for you? Check out How to Stop Wage Garnishments Without filing for Bankruptcy. The same tricks that apply to stopping wage garnishments may also apply to stopping bank account garnishments.

How To Fight a Garnishment Without a Lawyer

Janice — Mon, 08 Feb 2010 14:15:37 +0000

The dictionary defines garnishment as “a court order to an employer to withhold wages or send money to court or to the person who has won a lawsuit against an employee.” You don’t need to hire an expensive lawyer who will charge you hundreds of dollars an hour for his services to fight a garnishment. There are ways in which you can fight for yourself and win.

Before you begin to fight a garnishment, there are a couple of things that you will need:

a telephone
the courage to speak to your creditors (without losing your temper).

Contact the company that put a garnishment on your bank account or your wages. Don’t bother calling your bank to find out this information (you’ll be sent in circles). If you don’t know who took your money, go to the court (most likely it’s your local county civil court) that processed the garnishment, and ask to take a look at your file.

Offer to pay a fraction of what you owe (low ball them as much as you can). A garnishment takes money to process and they would much rather receive a payment from you voluntarily.

If offering to pay doesn’t work (or perhaps you can’t afford payments), fight the garnishments by moving your cash around so they can’t find it. Don’t use that bank account again, because they will dip into it again (when you are least expecting it). This is almost impossible to do with a wage garnishment: you have fewer options.

If you are subject to garnishment, bankruptcy may be your only option. Once a garnishment is in place, even credit counseling won’t help. Don’t do nothing, because if you ignore the garnishment order, you’ll wake up one morning to an empty bank account and a bunch of bounced checks. Don’t let that happen to you!

Remember: creditors record everything. You don’t want to be in court and have a judge hear you call the debt collection agency a $%^ker (even if they deserve it). Keep your cool.