Friday, April 15, 2011

Make Yourself Judgment Proof

Judgment proof debtors have a clear advantage over those who aren't – if and when a collection agency sues, judgment proof individuals do not need to worry about losing assets to an unscrupulous debt collector. Rather than helping the collection agency make money, a lawsuit against a judgment proof consumer often serves only to increase the collection agency's losses.

Photo by Purpleslog
Who Is Judgment Proof?

A judgment proof individual is anyone's who assets are fully exempt from collection. First, lets discuss the additional collection rights debt collectors earn after suing you and getting a judgment:
  • Can garnish your wages
  • Can garnish your bank accounts
  • Can place a lien against your real estate
  • Can place a lien against your personal property, such as an automobile
Keep in mind that collection agencies working for the federal government have these rights without the benefit of a judgment. Commercial collection agencies whose responsibility it is to collect old hosptial debts, library fines, credit card debts, etc, must have a judgment against you before utilizing any form of involuntary debt collection.   

Most people that hold judgment proof status in one area aren't safe in another. For example, if you are unemployed, a collection agency cannot garnish your wages because you don't have any. If you have a car, however, the company can place a lien against it and subsequently seize the vehicle. 

Judgment Exemptions That Protect You

You don't have to lack any assets at all to be considered judgment proof for legal purposes. Some forms of income are protected under federal law. Thus, if you survive primarily on one or a combination of the following income sources, collection agencies cannot force you to turn over the funds either via garnishment or a bank levy. 
  • Social Security
  • Child support
  • Unemployment
  • Veterans' benefits
  • Unemployment payments
  • Military annuities
  • Financial aid for college
  • Workers' compensation
  • FEMA benefits
  • Retirement pensions
  • Alimony
Remember, when it comes to bank account garnishment, you must claim your exemptions for them to be effective. Otherwise, the collection agency will try to seize them and the bank will willingly turn them over. 

Make Yourself Judgment Proof

While defending yourself in court against a collection agency lawsuit is always the smartest course of action, there are things you can do to reduce the odds of the collection agency being able to enforce a judgment against you and, in some cases, helps prevent a judgment altogether. 

Your wages are the most difficult piece of the puzzle. If you live on standard employment and don't work "under the table" or live primarily on government or retirement benefits, your wages are usually subject to garnishment. There isn't too much you can do about this unless you want to change employers frequently until the judgment expires. It typically takes debt collectors six months or so to locate you and file a new garnishment order. Some don't even bother. Thus, whether or not you are fully exempt from wage garnishment is more a matter of sheer luck than careful planning.  Unless, of course, you're willing to relocate. 

Four U.S. states do not allow wage garnishment by commercial creditors – including collection agencies. Those states are South Carolina, North Carolina, Pennsylvania and Texas. 

If you live in the northern U.S., purchasing property in Canada, filing for permanent residency (roughly $1500 last I checked) and getting a job across the border can prevent a collection agency from garnishing your wages. 

Protecting Bank Accounts From Judgments

Your bank accounts are safe if they contain exempt funds and you take care to claim those funds as exempt with your bank as soon as the collection agency tries to place a post-judgment freeze on your checking or savings accounts. Otherwise, a bit of creativity may be in order. 

Many banks overseas offer foreign bank accounts in U.S. dollars. Lloyds of London is just one example. You can use the bank for all of your checking and savings needs with the security of knowing that a collection agency can't touch your money. 

Let me be straight here: If you owe the IRS, putting your money into an offshore checking account doesn't help you. The IRS has options other collectors don't and doesn't even have to sue you before taking away everything you own. Collection agencies, however, would have to "domesticate" their judgments to collect from an offshore account. Few collection agencies would bother going through this trouble – and that's if they even find out about your offshore account. They have enough trouble tracking down bank accounts in the U.S. 

Keep in mind, I'm not telling you how to hide your bank accounts from collection agencies since that could potentially get me in trouble. I'm merely stating a method by which some people do just that. 

Collection Agency Liens Against Real Estate

If you own your home home, you'r at risk of liens after a judgment. Hiding assets after a judgment is illegal in most states, but taking care to place your assets in safer hands prior to the lawsuit isn't. If your house or car is paid for, a collection agency is  more likely to foreclose on its lien. If you carry a mortgage or auto loan, the collection agency would have to pay off the superior lien before it could seize the asset. Thus, its generally safer to keep a mortgage against your property. 

Renters benefit greatly here. Debt collectors cannot place liens against rental property if the judgment they hold is against the renter rather than the property owner. Yet another aspect of the lien process to consider is that the lien appears in the county you live in. The collection agency may very well overlook property you own in other counties or states. 

56 comments:

  1. God bless Texas! :)

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  2. Credit recovery services are needed when the creditor is unable to focus on the issue.Debt recovery is the forte of such debt collection services which help us clearing the delinquent accounts on time.

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    1. Collection agencies are the lowest of the low. They dont care if you cant feed your family or about to be homeless. They will take food out of your mouth and leave you homeless and hungry. In this economy they should be run out of business forever!!!!!

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    2. I agree collection agencies are absolutely ridiculous as well as credit repair companies. I made, what is probably a common scenario, a mistake of taking out a cpl retail store credit cards and a couple actual credit cards during my freshman year of college. Obviously ended up misusing them and had all four at or close to their limits- which at the time all four max limits combined were about 8k. So, I came across a thing online for credit solutions of America, the perceptive marketing made it seem like a no brainer; with nearly 7k in credit card debt and being a full time student- the idea of one simple monthly payment and the potential to settle my debt for $.50 on the $1. Therefore, I decided to call and check into it and I specifically recall asking the lady, "So I just pay you one flat monthly payment then you will allocate it to my seperate accounts?" and she responded with, " yes exactly then we will also negotiate with your creditors to get you the lowest settlement possible." So being young and dumb I said sign me up then I started paying them monthly and after the first month I got non stop calls from all creditors so I asked my new debt consultants what to do and they said just keep ignoring them it will help us leverage a better settlement. Long story short, after a year of paying credit solutions every month I called to check how I was progressing because they told me that I'd be debt free in 18 months. And that's when I found out I was completely lied to and none of the money I gave them went towards a single account of mine but rather in their pocket- and the lady tried justifying that the $95 I gave them every month for a year was their fee and I was supposed to save money on my own and tell them when I had enough saved to pay a card off- in turn, I wasted a $1000 paying credit solutions to leave me in 10 times worse of a credit standing than I started in. I then wasted a grand and accumulated another 3000 in interest. Not to mention my credit score dropped from 742 to 651. Credit Solutions of America was the biggest scam I ever encountered, I don't know what kind of people think its morally and ethically just to promote providing a service to help desperate people, but in reality they are only helping themselves and making their clients situations worse. It reminds me a lot of the banks that charge you $36 fees for over drafting ur account by 12 cents ( its like rich execs sit around and think, " I have a great idea, overdraft fees, this person is so poor they don't even have $2 but now let's charge them $36 then $5/day if they can't pay it in 5.") I'm pretty sure I didn't need to pay them a 1000 a year to realize that I need to save money to pay my cards off.

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    3. "AnonymousAugust 24, 2012 at 6:51 PM

      Collection agencies are the lowest of the low. They dont care if you cant feed your family or about to be homeless. They will take food out of your mouth and leave you homeless and hungry. In this economy they should be run out of business forever!!!!!"

      So in other words you think you should be able to just stiff your creditors on debts you are legally obligated to pay. So it's not ok for collection agencies to take your money to pay what you legitimately owe but it's ok for you to cheat creditors out of what you owe them. There's some anti-logic.

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    4. AMEN! So it would be okay for me to walk into their house and take whatever I want, and not pay them..right? Quit complaining and stop charging things you can't afford..pay your bills and live within your means!

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  3. Hi there !
    Flagging economy & bad debts ! We all know that an original creditor always go for a third-part debt collection agency.Reason being their dedicated time & work process.Collections agency relevance is gaining new heights and I think that is why FDCPA has given the consumers such a wide variety of legal rights.

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  4. thanks for posting this. I have a delinquent credit card account, and tried to work with collection agency on paying it off but all they care about is settling for a lump sum. If i had that kind of cash, i would have paid off my credit card before it even hits collections. They offered to settle for half of the amount but when i ask if i can make 4-5 payments since my income wasnt all that great, they refuses and on top of that lectured and threaten me. Every time they called i told them i didnt have the money and try to work out a payment plan but they refuse and became very rude and kept telling me i have to pay and that i am breaking the law, they are going to garnish my wages and other unpleasant words. when i told them i want to speak to their supervisor they hang up on me. so i ignore them all together. i dont even pick up their calls anymore. if they had settled with me and worked out a payment plan, they would probably already have their money by now and not waste time calling and threatening me. sometimes i wonder if they have a brain. get the full settlement within 5 months or keep calling me for 5 months and not get any money at all...mmm...kind of a no brainer to me. SMH!

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    1. Never, ever work with a collection agency, period. If you want to repay a debt, call the original creditor and work it out. If it's older than 6 months after last payment, forget it, the creditor already already wrote it off as bad debt.

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    2. Never, ever work with a collection agency, period. If you want to repay a debt, call the original creditor and work it out. If it's older than 6 months after last payment, forget it, the creditor already already wrote it off as bad debt.

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    3. So why did you run up bills you can't pay? Your bad debt gets passed along to me in the form of higher interest on my loans. Why should you get 'free' money on a credit card account for being irresponsible?

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    4. Anonymous Nov 14 - you really think interest rates change due to individual debt levels? Educate yourself. It's worth the effort.

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    5. Anonymous is probably a debt collector. Debt collectors are nothing more than parasites on the economy. They are a useless middle man that pretends to do things like "keep interest rates low", when they really don't (the Fed does that). Basically debt collectors buy charged off debts from banks at huge discount from the original amount, add a large sum of interest on it, then start harassing the debtor. Debt collectors try to make stupid arguments like " why did you run up bills you can't pay?", as if everything were that simple. These are the same people who NEVER ask that question to the same banks they claim to represent that either went bankrupt or needed a bailout in 2008/2009. Whenever big corporations go broke, they have far, far more options for restructuring their debts; however, individuals stuck dealing with dishonest debt collectors will get ripped off unless they treat them very mean. I defaulted on my debts over 5 years ago after losing a year of work due to severe illness, and 2008 didn't help either. Rather than get emotional and panic, I just sat back relaxed, watched what they did, consulted with an honest lawyer, and I found out what they can and cannot do. Even with 3 judgments against me, I have still to this day paid ZERO to my any debt collectors. The debts have been bought and sold so many times that several were recorded incorrectly, and they couldn't be verified that I owed them, so I did have to pay anything. Of 8 charged off accounts, only 2 are still collectible. The debts are so old now that the collections letters actually say "because of the age of this debt, we won't sue or take any legal action, but we ask that you make a payment." The reality is that MOST people who default don't want to default, nor did they intend to, but debt collectors will have everyone believing that all people who default are lazy and irresponsible. In the real world, anyone can run into financial troubles, even debt collectors run into financial troubles.The first year of default was very hard, but since I was completely broke due to my hospitalization, the debt collectors really could do nothing. Even to this day without filing bankruptcy, they still can do nothing besides make threats.

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    6. Except that you are incorrect in many of your theories. You may have found a way to skip out on your bills, but those people who are working a job, and paying their bills collecting your bad debt are at least working and not making excuses for themselves. No, I'm not a debt collector, yes..I do know the laws quite thoroughly. Proud of yourself for skipping on bad debt? That would be a great pick up line.. wow. OH..and BTW..do some research on debit collectors, they are one of the largest boost of monies into our economy. Without them, you wouldn't be able to afford the computer you are typing on.

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    7. Anonymous, I highly doubt anyone besides someone in the debt collection business will agree with you. All of your bull--t explanations about how debt collectors somehow create most of the wealth for America are the same nonsense that the debt collectors I argued with are trained to tell me. Like every debt collector, you seem think in primitive black and white terms as if anyone who can't pay their bills is just "lazy." What you do in your collection office is NOT hard work. Debt collectors just sit in an office all day and call and harass people who are usually to poor to afford to pay their bills. In my case I was hospitalized, so exactly how was I supposed to be working? How is that just making excuses for myself? You see, I didn't "skip out on my bills"; I wanted to pay the actually original creditors, not parasitic debt collectors. Debt collectors are nothing more than middle men who just buy the debt at gigantic discounts, then try to trick the debtors into paying the original full face value; thereby, making significantly more than any creditor ever made without doing ANY real work... and you say you were working lolllllllll. Yeah right! Debt collectors are useless; they don't manufacture anything; they don't make anything anybody needs; they don't provide any meaningful service to anyone aside from themselves (the banks, in most cases, have already charged off the debt by time it's sold to a scumbag debt collector). You can't fool me; I worked in banking for many years, so I know how it works, and that's why I was able to avoid paying even one penny to a worthless debt collector who produces nothing of any real value. Debt collectors are just part of the useless expanding "service economy" in America that doesn't make or manufacture anything which is rooted in debt. Eventually the debt problem on the government, corporate and individual level will become so bad in this country that this entire system will fail if nothing changes. Debt collectors do nothing more than take people who can't afford to pay their bills, accuse them of being "deadbeats", "lazy", "losers" or what ever else and try to beat on a dead horse. As I said in my last post, when large Wall Street firms can't pay their bills, creditors help restructure the debts; whereas, common people have to deal with debt collectors who rip them off, trick them and prey on their ignorance while making huge profit margins in the process.

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  5. This comment has been removed by a blog administrator.

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  6. Ihave only child support and three kids can credit agencies take my car or sue me
    missouri

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    1. Get a job, and stop using ur kids as a,meal ticket...please LEAD BY EXAMPLE, AND STOP ACTING LIKE A VICTIM...

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    2. what a shallow comment without knowing her circumstances. she could be disabeled, she could be the victim of fraud, she could suffer a hardship you know nothing about. Be human, be real, leading by example is seeking FIRST to understand, then to be understood. Sometimes...people act like victims because they ARE victims.

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    3. "AnonymousAugust 27, 2012 at 5:13 PM

      what a shallow comment without knowing her circumstances. she could be disabeled, she could be the victim of fraud, she could suffer a hardship you know nothing about. Be human, be real, leading by example is seeking FIRST to understand, then to be understood. Sometimes...people act like victims because they ARE victims. "

      I am sooooo sick of hearing all the excuses from deadbeat debtors which all come down to their selfish belief that their financial well being is more important than that of their creditors. The creditors have expenses of their own including payroll to make. What possible excuse is their for someone borrowing money on a credit card or other method and then not paying back the lender???? Right, there isn't any.

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    4. How about a car accident that wasn't their faullt. Or a child's sickness that forced them to give up their job. There are many things that happen in life, "Life happens when you already have plans" It sounds to me like you work for a credit agency and are justifying your cold heartedness to yourself. I hope the rest of the world doesn't buy into your ignorance. It's a cold hard world, and people like you make it colder. Especially for yourself.

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    5. Ur a stock holder sent you

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  7. I live in South Carolina, where I know a creditor (credit card) cannot garnish my wages to collect a debt. However, can they freeze or seize my bank account? I am not sure if it all falls under that same law and protection. Please respond, as I am scared out of my mind.

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    1. You betcha sporty and we can find your bank accounts too. Try paying your bills instead of stiffing companies that loaned you money in good faith according to terms you agreed to. How would you like it if you loaned someone money and they just decided they weren't going to pay you?

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    2. ok so keep a minimal amount in that account work on a cash basis only and let anonymous go back to skip trace or trolling the boards to be an as&hole to whomever he chooses.....we loan the government money all the time and they payoff and bail out your industry so whatever..bye felicia

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  8. I live in South Carolina so I know that my wages cannot be garnished by a credit card debt collector. However, can my bank accounts be seized or frozen? Or, does this all fall under the garnishment protection in South Carolina? Please respond as I am in a panic due to a recent letter sent from a third party collection agency on behalf of the credit card company.

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    1. To the best of my knowledge, the only state that does not permit creditors to levy bank accounts is Delaware. But please keep in mind that this can ONLY happen if the collection agency has sued you an obtained a judgment. They can't just decide to seize your bank accounts. It doesn't work that way. If a collection agent threatens to seize your bank account without a judgment, its a violation of the FDCPA and federal law gives you the right to take legal action.

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    2. Debtors almost always lose in court because THE DEBTS ARE ALMOST ALWAYS LEGITIMATE. They just don't want to pay and want to selfishly create financial problems for their creditors and raise everyone elese interest rates to makeup for their bad debt.

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    3. I am unemployed and I owe taxes from 2009 to the state of Alabama. i got a letter from the ADR collection division it is a final notice before seizure i have no personal property i am unemployed. i rent an apartment and my disabled father lives with me. i am worried because i am on his checking account so i can take care of his affairs. he gets a monthly ss disability check since my name is on the account can the state take his money. thank u

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  9. This gives some relief.

    When I was in college, I had a lease and left half way through when I got a job elsewhere. The landlord took me to court and got a judgement for two months rent .... $900 plus other fees it was under $1500. The judge told her she could not sue me for the other months yet because the apartment was sitting vacant and she needed to make reasonable efforts to fill it. She never found anyone and when the lease ended she sent me a bill for over $5000 for the remaining time and cleaning fees, a broken chair and some other crap. Now this collector is calling me wanting the money. I dont agree with the bill and the one time I spoke with him he was not cooperative, he did not want to send me a detailed statement he just wanted me to pay up right then and there. I havent answered their phone calls since but I was worried about them possibly trying to levy my account. Im in graduate school so I live off financial aid and work part time. I guess my concern now is if they do try to sieze my account, I know financial aid is off limits but could they try to seize the entire $5000 they are wanting or can they just do the judgement awarded to them in court? I hope this would never happen though. And this is a different topic but by me not agreeing with the bill, how can I contest it and get it lowered/corrected so I can try to start making efforts to pay it.

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    1. I do not what state you reside in but Delaware Law states the following:a tenant may terminate a rental agreement early that is before the expiration date by giving the landlord a 30 day written notice if: the tenant is required by his or her current employer to move a distance of more than 30 miles. Look up landlord/tenant code for the state in which you reside to see if it reflects reasons to terminate your rental agreement. Hope this is helpful.

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    2. So, basically, you think it's fine for you to break your lease and stick your landlord who probably has a mortgage payment to make. You little college kiddies have no chance of getting in our properties. We just laugh at your pitiful credit scores when you apply and your behavior as described above is why we DONT WANT TO RENT TO YOU!

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  10. Don't feel sorry for banks and retailers who extort excess interest charges and fees from customers. The same banks received 0% TARP fund and currently only pay .03% fed fund rate money.
    Banks rip off consumers with 26-28% interest charges which should have been capped at 2-5% over fed funds rate so it would be" possible" to pay off the debt.
    This one oversight in the FDCPA would resolve 90% of debt problems.

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    1. If you don't want the loan don't agree to the terms. Simple as that. And 2-5%??? Don't make me laugh. At those rates nobody with a credit score under 750 could even get credit then you'd be complaining about that.

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    2. Omg, Murdolf....the bank corporations went ahead a lended millions to consumers who could obviously not afford the loans, and many documents were executed fraudulently by lower executives. So, who is worried about the credit card, banking industry, which perpetuates to help people, the consumers. Really? And yes, the consumers should take responsibility; although the creditors are held at fault and have been found responsible too in such fashion. I could go on. I know professional what I'm talking about and simply act of ignorance is why you would consume yourself, vicariously describing, a creditor/collector to be solely just in their practices in which they do not abide by the laws that govern them. There are many levels of laws being broken, both parties are responsible. When you pick a side to break down upon it's to make yourself feel better and just. Example. I heard a bankruptcy attorney say, If he/she was not an attorney they would stop making payments on their house; save enough money to pay down on a new house. It's all a game in the USA, just understand and know how to play it just like the collectors and bank corporations. ♡

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  11. Hi evеryоne, it's my first visit at this website, and paragraph is genuinely fruitful in support of me, keep up posting such articles or reviews.
    my site: loans for bad credit

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  12. Okay, I live in NC ..... I can not afford an attorney and my husband has a judgement against him for a hospital bill. Now we have recieved paper work (exemption papers) stating pretty much that they are going to come and collect our property to pay off the debt. I am freaking out. can they just take anything and everything?? we dont have much as it is. we rent our home and dont have any money in the bank. Can they take things that we are borrowing from friends and family?? help please!!!!

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    1. Sorry, I somehow missed this question. They can't take anything and everything. Your state has exemptions for each category of property. For example, in NC you get a $2500 vehicle exemption. Even in states where they can take property like this, they often don't. It's a huge hassle to seize or repossess property that already has a lien. Take a house for example. Can they foreclosure? Sure. But foreclosure is costly, and your mortgage holder still has the right to get paid before anyone else. So even if they spent the money to foreclose, they may not get a dime after the sale. So the answer to your question is: it depends. Things you own free and clear have the greatest danger of being seized. I strongly recommend that you talk to a licensed attorney in your area before a bad situation gets worse.

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    2. So why didn't you make a payment arrangement? I have yet to see a hospital that won't happily accept a small fraction of the total balance in monthly payments. You are just driving up my insurance costs because your unpaid debt is passed on to me and everyone else who pays our bills. You are why medical care is so expensive.

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    3. "Take a house for example. Can they foreclosure? Sure. But foreclosure is costly, and your mortgage holder still has the right to get paid before anyone else. So even if they spent the money to foreclose, they may not get a dime after the sale. So the answer to your question is: it depends. Things you own free and clear have the greatest danger of being seized. I strongly recommend that you talk to a licensed attorney in your area before a bad situation gets worse. "

      Sorry to break it to you but you don't have to force sale of the house. You slap a lien against it and then it can't be sold or refinanced without the judgement getting paid. Automobiles and other personal property that are not exempt is seized on writ of execution leins or no leins and sold by the sheriffs dept "subject to all liens and encumbrances". Liens will not protect any personal property in NC. The lien just passes to whoever purchases it at auction and the property can be repossessed.

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  13. If you made a payment agreement can they still do the garnish on you check??

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    1. Technically yes. If they have a judgment, they can garnish whenever they wish unless you either live in a state that doesn't allow wage garnishment for commercial creditors (like SC), or they have a written agreement with you agreeing not to garnish your paycheck in exchange for regular voluntary payments. Otherwise, they can garnish as they please – whether you're making payments or not.

      If it were me, and they already had a judgment and were already garnishing me, I don't think I'd bother to help them out by sending in even MORE money. Of course, a lot of companies don't bother to even request garnishment if you have a payment agreement.

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    2. What he or she really means is that they have a payment agreement and aren't following through on it just like they didn't pay the original debt......

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  14. I believe that you can do a lot to fight for non-payment of credit card debt. Far too many people do not reply to court summons and have a default judgement awarded against them. I fought all the way and walked away from $63,000 worth credit card debt. If did it, other can too.

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  15. We are bullet proof as far as our retirement income. The collection agency for Capital One obtained a judgment against us. We notified the bank that are funds were exempt from collection but they said they only honor federal retirements and or SS benefits. Who do we notify so we can put our retirement funds in our bank account so they are not turned over to the collection company.

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  16. Lee.... Are you aware of this? I saw someone post mentioning using these anticipated refund services like H&R Block offers. This is scary!
    http://en.m.wikipedia.org/wiki/Refund_anticipation_loan
    Scroll down to the bit about 3rd party debt collection! :-O
    Crazy!

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  18. Hi Lee, I'm in Canada and your URL address brought me to this site. Could you provide some legal advice for Canadian citizens as well or at least correct the URL?! Or could you provide me w/ a link to answe my questions?

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    1. I'm not sure what you mean by "correct the URL." My URL takes everyone here, no matter what link they follow. That being said, I don't post links to this blog anywhere. Any link you followed was posted by someone else. I do no self-promotion so I apologize if you were sent here in error since the information here is for U.S. residents dealing with credit issues

      In Canada, credit and the laws governing it aren't federal, they're purely provincial. I have some layman's knowledge of the credit reporting regulations present in Ontario but I'd be shooting blind on the other provinces. I don't want to steer anyone in the wrong direction. If I knew exactly what information you were looking for and which province you're living in I would be happy to try and find a website that can help you.

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  19. 6/5/2014

    My husband and I seem to be judgement proof according to what I have read on the internet. Our yearly income is derived from monthly Bank deposited SS direct deposit checks and quarterly by mail small retirement annuity checks. We have no savings, and barely get by each month on my husband’s retirement income outlined above.

    I am also in my early 60’s and an ill housewife confined to the home, with Acute Asthma, Incontinence, COPD, and Degenerative Rheumatoid Spinal Arthritis. I can barely stand long enough to walk a few steps. I became ill shortly after 9/11 transpired and could no longer breathe, walk, or function properly to seek employment. (Husband also has life sustaining medical problems).

    We can no longer pay our monthly credit card debts as we are already doing without many food items, other basic survival necessities, and many life sustaining meds. (Also our medical bills through the years have been quite numerous).

    We do not want to end up like Mrs. Santiago who had her rent stabilized lease and succession rights taken away from her last year which made televised newscasts and public headlines, when her landlord paid the trustee for all of her credit card debt after she filed for chapter 7 bankruptcy.

    Also they still raise credit card limits without even asking if the person wants a higher limit, knowing people are aging and there may come a time when due to situations beyond their control, they find themselves unable to continue making high interest credit card payments.... (there is an element of risk credit card companies are willing to take to make higher interest earned profits), and yet there were never any real safeguards enacted by them, in order to prevent giving out unrequested higher credit limits??

    Where are the safeguards for the average citizen in all of the above??? This is indeed very sad.

    If we could continue to make the monthly CC payments, believe me we would. Now our American pride is gone, and death seems to be the only escape, but we could never result to that. It is sad we have no living relatives to offer any advice or other options, but find ourselves all alone. If one of us dies the other will probably not be able to survive alone, but so far prayers seem to keep us here. (We believe where there is life there still may be some hope).

    Questions and options of concern are outlined below, and greatly appreciated would be your advisement Lee, of which I thank you in advance for any options you may feel we could safely utilize.

    1) In view of this situation since we are elderly, ill, and judgement proof should we stop all credit card payments and in writing return receipt requested notify both credit card companies of these circumstances? Please kindly advise.

    2) I read some internet web sites stated to notify them all in writing that we are judgement proof, and can no longer make payments, and some web sites stated do not call or notify anyone at all, and to stop answering the telephone, and also just stop all credit card payments. (Please kindly advise).

    3) Also we do not wish to make newscast headlines and also need to know if we are sued anyway, should we go to court if we are served with legal documents, and if we do can we still lose our rent stabilized Scrie entitlement apartment legal rights? (We also cannot pay legal fees for legal court related representation, so if we should still go to court what is the most advantageous way to defend ourselves, and also present our situation to the Judge, and hopefully win?). (Please kindly Advise)

    Thanks again Lee and please know you have helped so many people in this type of situation and I am sure you will receive just rewards when the time arises, and rightfully so.......Bless you and many thanks Lee!

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    1. Your question is long, and so is my response. Please copy and paste the following link into your browser to reach the post answering your question.

      http://collectionagencydebt.blogspot.com/2014/06/q-will-i-lose-my-rent-controlled.html

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  20. I agree you may not know a persons circumstances. My daughter was hit and injured by a drunk driver, my daughters insurance limits have been exhausted and we are trying to work something out with the at fault drivers insurance company to pay the bills. My daughter has no health insurance (she is a server), the injuries she incurred were of no fault to her and all we ask is for the hospital to wait for the settlement and we will pay in full. Our attorneys have contacted them offering a "contract" stating this. The hospital has turned it down and refuses to work out a payment arrangement, they have sent it to collections and we just received a letter threatening judgement. We do not believe in ignoring our obligations....but she should be able to put this off until she receives the money from the at fault party. Most instances I would say YES pay your bills but sometimes there are extenuating circumstances.

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    1. I strongly recommend telling your attorney to write a letter to the hospital administrator and/or board of directors explaining the situation and requesting that they please make an exception and hold the debt for another 90 days or however long you think the settlement will take. He should also point out that, as the victim, your daughter does not deserve to have her credit ruined. If these attorneys belong to the insurance company and don't really care one iota what happens to your daughter, only their client, its time to pick up your own consumer law attorney. There ARE ways to extend this.

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  21. Today I received a notice of right to have exemptions designated. It states that the original judgement was filed on April 10, 2008. I have no recollection of any of this. We are in NC. If the debt is in my name only, can they levy a joint banking account? We have no equity in our home or cars. Please advise.

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    1. The creditor HAD to serve you with a formal summons and complaint before suing you. If you don't respond, it gets a judgment by default. If you never received a summons, you were impropyerly served and can file a motion in court to have the judgment vacated.

      The paper you got will contain a list of your state's exemptions. You have to claim the exemptions that apply to you and re-submit the form to the court. You have 20 days in which to do this. If you do not claim any exemptions, you won't get any. That gives the creditor the ability to seize assets that would have been exempt if you had properly claimed them as such. Don't let that happen. Fill out the form and turn it back in within the time period.

      As far as your bank account goes, yes, the creditor can levy it if you don't claim it as an exemption. You could feasibly claim it under the "wildcard" exemption but you may have to give up other exemptions in order to do so. I don't know, North Carolina isn't one of my state's of expertise. I strongly recommend you schedule a free consultation with an attorney in your area to ensure that you protect as many of your assets as possible or, if you're lucky, vacate the judgment altogether.

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    2. Hello Lee, I AM looking into the legality of my situation that has happened to my family recently, and it was not because of negligence, but of "getting lost in the process". Anyhow, I relocated my family down to South Carolina from Michigan a year and a half ago, and recently checked with my bank about obtaining a VA loan mortgage for the very home we have been leading since we moved down here. I was instantly approved under the VA guidelines a couple months ago, but was informed by the mortgage broker that I had state tax liens from Michigan, where we are originally from. A little state tax due for a few years in a row had grown into $12k with interest and penalties over the years to my knowledge. The whole time, I was getting approved for vehicle loans and leases, and credit cards, but always wondered why my credit score stayed in the low 600's. So, I called the Michigan State IRS, fully knowing that in the state of South Carolina they will close out state tax liens with 10%. As a 20 year successful car sales veteran, of course I tried to bargain, and they stood firm, regardless of me not being aware the whole time. Somehow, I was not made aware until this point from 10 years ago. But what follows is because I made the mistake of contacting them, because my wife loves the home we are leasing and wants to purchase it. Since then, a month ago after the fact, I had a heated disagreement on the treatment of one of my clients by my sales manager at my dealership, and I was terminated, because my morals were a threat to him being exposed upon his decision. Albeit, that made me become disenchanted with my 20 year career, and knew the local real estate was starting to boom, and paid to go thru South Carolina Real Estate school, and obtained my pre-license, and over this past week, passed both my National and State exams, and am now fully licensed, but visiting builders and brokerage firms daily to make sure I pick the right fit for me in my lateral career change. Thru my excitement over this past holiday weekend, I found out thru my bank app, that the state of Michigan seized $183 worth of $400 in cash tips my wife had made for a couple nights over the weekend, and my bank charged a $119 fee, leaving maybe $87 out of her hard earned tips, when I am technically still unemployed. I am confused as to the research I have done online, and based upon the phone calls I've made the first two business days, being yesterday and today, between my bank and the Michigan IRS. What I've been told, unless is unemployment or social security income, it can be taken. The gal kept talking over me, all while I kept trying to reassure her that I am now a South Carolina resident. I live in a heavy tourist city, and I'm sure you can guess it, the taxes are basically paid here thru the tourism. But regardless, I DON'T feel they can do this to me from the research I've done, unless I'm mistaken. I feel like that either the Michigan IRS or my bank did not understand me on the phone today. I have a series of a few questions.
      #1) Is this legal for Michigan IRS to do to a now South Carolina resident that is currently unemployed, and his family of 4 is dependent on his wife's tips for the time being?(I even explained this to the lady with Michigan IRS on phone today)
      #2) Being that the state of South Carolina will close out your state tax liens for 10% payment, will the state of Michigan NEGOTIATE AT ALL? Their lack of being able to inform me other than the mass chaos of back to back babies, and being a sales manager and working 70 hours a week back in the timeframe 10 years ago. I feel the interest and penalties quadrupling the amount is extremely excessive.
      #3) Are there any banks that will protect us, to your legal knowledge for my state?

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