Texas is one state that’s cracking down on people caught speeding too many times: hitting them with “surcharges” and throwing them in jail if they don’t pay up. That’s according to this article on debtor’s prisons, which tells the many ways you can be jailed in the United States for the crime of not having enough money.

Not paying your child support? Expect to be jailed if you don’t cough up the cash. You can also be jailed for not filing your federal taxes or not paying those taxes once you’ve filed.

But perhaps the most surprising way that you can find yourself in prison is not paying your credit card debt.  Thanks to over-zealous attorneys and collections companies hit by the financial downturn and resorting to borderline tactics, you might find yourself in the county jail without any fair warning. In many states (like Florida), all a credit card company has to do to notify you of court action is to send you a first class letter. If you don’t receive that letter (say, they send it to your old address), you could find a nasty surprise next time you check your credit report–a judgment against you. That civil action could lead to an arrest warrant if you don’t pay up.

Technically, you can’t be arrested for not paying a debt. But you can be arrested for contempt of court–and the collection agency lawyers want this to happen, because a person sitting in jail will generally pay up a lot faster than someone sitting at home and not answering the phone. A judge may order you to pay several thousand dollars within a day–and he won’t care if you have to skip a mortgage payment to do so.

Check your credit reports regularly, comply with court proceedings, and you may find yourself able to keep out of jail. But if the government–or a collections agency–thinks you have the means to pay (even if you don’t), be alert for that knock on the door: it could be the sheriff’s department coming to take you away.

Related posts:

1. Yes, there is a Debtors Prison in the United States
2. Cease and Desist Letter: Vital Information Often Overlooked by Debtors
3. What Happens if I Don’t Pay My Bills? Will Credit Collection Agencies Call?

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

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1. What Type of Bank Account to Open to Avoid Garnishment?
2. How to Fight a Bank Account Garnishment
3. How to Avoid Bank Account Garnishments

1. 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.
2. 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.
3. 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.
4. 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.
5. 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).

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1. What Type of Bank Account to Open to Avoid Garnishment?
2. How to Stop Garnishment of Bank Account
3. How to Avoid Bank Account Garnishments

• Homestead: An exemption of up to $30 000 applies to real property that you occupy or intend to occupy. This amount increases to $39 600 for joint owners. There is also provision to claim exemption for house boats and mobile homes. The only other requirements for this type of exemption are land size. Your home cannot exceed one block if it is in town or exceed one hundred and sixty acres outside of town.
• Personal property. This includes items such as: bank deposits (to $7500) and higher education savings accounts, jewelry and clothing ($1800), furniture ($3000), cars ($1700) and firearms ($1000).
• Income and wages: A percentage of income and wages are eligible for exemption as well. This means that creditors cannot take all of your earnings for the purpose of covering debt. In Oregon, you are able to legally keep 75 per cent of your wages or $170 per week, whichever constitutes the largest amount. For low income earners, a judge may even authorize a larger exemption.
• Life insurance, pensions, retirement savings and public benefits Annuity contract benefits to $500 per month, Fraternal benefit society benefits, Group life policy or proceeds not payable to insured, Health or disability proceeds or available value, Life insurance proceeds or cash value if you are not the insured.

This list is just a summary. A complete list of every exemption can be found in my book, Stop Bill Collectors!

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1. Bankruptcy and Judgments: What are the State Exemptions for South Dakota?
2. Bankruptcy and Judgments: What are the State Exemptions for Pennsylvania?
3. Bankruptcy and Judgments: What are the State Exemptions for Rhode Island?

State exemptions for Pennsylvania.

As with other US residents, people living in Pennsylvania can claim property as exempt, so long as they have not used that property as security for a loan. The moment you sign over property as collateral for a loan, it ceases to be protected under exemption laws.

Exemptions that can be claimed for eligible property in Pennsylvania:

1. Homestead:While there is no homestead exemption in Pennsylvania, there is provision to claim under the common law of Tenancy by Entirety. This applies to married couples who own a home together (joint ownership). Tenancy by Entirety holds the home exempt against the debts of one spouse only. In other words, if you’re one half of a married couple and your spouse doesn’t have anything to do with your debt–you can’t lose your home.
2. wages: Wages of prison inmates and the wages of victims of abuse are exempt.
3. Life Insurance: Life insurance is exempt as long as the beneficiary is your spouse or child.
4. Personal property: Exemptions include bibles, schoolbooks, clothing, military uniforms, and sewing machines. There is also a ‘wild card’ exemption, which applies to $300 of any property whether it is cash, real property, sale proceeds or securities.

This list is just a summary. A complete list of every exemption can be found in my book, Stop Bill Collectors!

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2. Bankruptcy and Judgments: What are the State Exemptions for South Dakota?
3. Bankruptcy and Judgments: What are the State Exemptions for Tennessee?
]]> http://www.stopbillcollectors.us/articles/bankruptcy-and-judgments-what-are-the-state-exemptions-for-pennsylvania/feed 0 http://www.stopbillcollectors.us/articles/bankruptcy-and-judgments-what-are-the-state-exemptions-for-rhode-island http://www.stopbillcollectors.us/articles/bankruptcy-and-judgments-what-are-the-state-exemptions-for-rhode-island#comments Mon, 08 Feb 2010 16:38:51 +0000 Janice http://www.stopbillcollectors.us/?p=302
5. Bankruptcy and Judgments: What are the State Exemptions for South Dakota?
6. Bankruptcy and Judgments: What are the State Exemptions for Pennsylvania?
7. Bankruptcy and Judgments: What are the State Exemptions for Tennessee?

South Dakota residents must follow the state exemption laws when filing for bankruptcy. The only Federal exemptions that apply are those exemptions listed in Federal laws other than the Federal Bankruptcy Code.

A Guide to State Exemptions for South Dakota:

• As with most states, there is a homestead exemption for residents of South Dakota. Here, the homestead is protected to an unlimited value, as long as it is no larger than one acre for a home in town, or no larger than one hundred and sixty acres for a home outside town. The sale proceeds from your home are also protected – up to $30 000 for most people, except those over 70 years of age, who can claim up to $170 000. It is important to remember that only for residents who have been living in South Dakota for a minimum of three years and four months are able to claim exemptions greater than $125 000.
• You are also entitled to wage exemptions, which limit how much can be taken from your wage in debt collection by creditors. In South Dakota, wages earned sixty days prior to filing for bankruptcy are protected, as long as they are needed to support a family. There are also Federal non-bankruptcy laws that apply to wage garnishment.
  Further state exemptions for South Dakota entitle you to protection of certain items of personal property, pension or retirement savings and life insurance.

Knowing your entitlements is the first step in protecting your property when faced with bankruptcy or judgments. It is important to be able to fill in the required bankruptcy forms accurately so that you can be confident that you protecting what you are legally entitled to protect.

This list is just a summary. A complete list of every exemption can be found in my book, Stop Bill Collectors!

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1. Bankruptcy and Judgments: What are the State Exemptions for Tennessee?
2. Bankruptcy and Judgments: What are the State Exemptions for Rhode Island?
3. Bankruptcy and Judgments: What are the State Exemptions for Pennsylvania?

This is certainly the case in Tennessee, where state law requires anyone filing for bankruptcy to use the state exemptions listed in state law – not the Federal bankruptcy exemptions. The only Federal exemptions available to individuals are “non-bankruptcy” ones – i.e. those exemptions found in Federal laws, but not in the Federal Bankruptcy Code.

So, what are the state exemptions for Tennessee for judgments and bankruptcies?

• Most importantly, there is a homestead exemption for Tennessee residents, although it isn’t very much. This means that you can protect the equity you have in your family home. Single homeowners are entitled to $5000, whereas joint owners can claim $7500. These amounts vary again if you have dependent children or are over the age of 62. However, these exemptions only apply if you have been living in Tennessee for more than two years. If you have recently moved to Tennessee, you may be required to claim exemption under the laws of your previous state of residence.
• You can also claim a wage garnishment exemption. This limits how much creditors can collect from your wages. In Tennessee, you are entitled to keep 75% of your wage or 30 times the federal minimum hourly rate – whichever is greater.
• Other state exemptions for Tennessee include a ‘tools of the trade’ exemption up to $1900, which covers those tools used for work purposes, certain personal property exemptions, life insurance and pension and retirement savings exemptions.

If you are being sued by your creditors, the exemptions are those items that you won’t be forced to sell. When filing for bankruptcy in the state of Tennessee, it is very important to familiarize yourself with the precise exemptions you are entitled to claim. This will ensure that as much of your property, income, savings and assets are protected and remain yours to keep.

This list is just a summary. A complete list of every exemption can be found in my book, Stop Bill Collectors!

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1. Bankruptcy and Judgments: What are the State Exemptions for South Dakota?
2. Bankruptcy and Judgments: What are the State Exemptions for Rhode Island?
3. Bankruptcy and Judgments: What are the State Exemptions for Pennsylvania?

• 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.

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1. What Type of Bank Account to Open to Avoid Garnishment?
2. How to Fight a Bank Account Garnishment
3. How to Avoid Checking Account Garnishment

• 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!).

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1. How to Stop Garnishment of Bank Account
2. What Type of Bank Account to Open to Avoid Garnishment?
3. How to Fight a Bank Account Garnishment