Account emptied - wtf?

[Tinkar2]

Hello,

One of my close loved ones has a problem. He had some collection problems in the past and a creditor all of a sudden emptied his bank account.. or put the money on hold technically. The letter said it was on hold, if anything was exempt to fill out a form.

He got the letter a few days after writing a lot of checks for various things... car repairs, RENT, utility bills, etc. He put 700 into the account and wrote about 700 in checks. They took the 700 before the checks went though.

Is there any way to get this money back? The person is already in a really bad spot financially, and will have even more problems when $700 worth of checks bounce this week... double the damage.

Any advice? Any help? This makes life quite difficult

[HHM]

Well, to bad your friend waited this long to start dealing with the situation, but I suppose better late than never.

What this situation probably means is a creditor sued your friend and is now executing that judgment (hence, the exemption claim form). If this was a creditor who had an automatic debit authorization, there would be no exemption claim form. So basically, your friend got sued, didn't respond to the lawsuit, and now there is a judgment against them.

Unfortunately, about all your friend can do is fill-out the exemption form.

[cso5@]

Yes, that's about the size of it, I am afraid.

That happend to me too. And when you fill out the exemption form, it can only be exempted for certain things -- stuff they can't touch by collections. Or if it was a joint account -- the other person can claim it was money they had put in there. Or maybe like worker's comp money or social security is exempt -- I am not sure, 'cause none of mine was.

:-( I am sorry that happened to your friend.

Beware, there is probably a garnishment order out there someplace, if your state is a garnishment state.

If your friend opens another account, they can take that too. That's how it was for me, if I remember right. I was strictly cash only for a time....cashed what was left of my paycheck after garnishment, and bought money orders for stuff I would ordinarily pay with by check. Walmart is the cheapest I've found at 46 cents.

It's the pits when that happens, I can certainly sympathsize.

[treehugger1]

I read a lot of bad advice on a variety of websites where some folks claim if you stop paying on unsecured debt, there is nothing the creditor or collector can do. The truth is that there is a great deal they can do, and do them they will. If one is going through hard times and know they cannot pay their bills, the first thing they should do is gain control over what they do have or will have.

If the money in your friend's account was all from wages, then he/she should look up there state's garnishment and exemption laws. In general, 75% of wages are exempt from garnishment or siezure even when deposited in a bank account. With some work, your friend "might" have at least 75% of the account freed for his use.

[JRScott]

Your friend is probably in a tight spot. As pointed out it appears that a creditor has gotten a judgment in court against them. Most likely your friend did not appear in court and a default judgment was ordered against them. Then stage two is they either garnish your wages or take your bank account. This is done by court order as well.

Your friend will need to get a paper check and cash it at another bank in the future. He'll have to go to cash only. For now fill out the exemption paper, I hope he has some that is exempt. The wal mart money orders are the cheapest for mailing payments. I'm sorry to hear they are in such a tough spot.

It is likely they'll garnish more in the future if the full claim has not been met.

Your friend depending on circumstance might should talk to a bankruptcy lawyer, its late in the game but if there is one garnishment there are usually a few behind that one coming too.

[SinkingFast]

If the money in your friend's account was all from wages, then he/she should look up there state's garnishment and exemption laws. In general, 75% of wages are exempt from garnishment or siezure even when deposited in a bank account. With some work, your friend "might" have at least 75% of the account freed for his use.

Along those same lines,.........

Many State's have specific Laws protecting money earned as a result of age, disability, or paid as part of public benefit. So if your friend's money is from retirement, pension, SSI, SSDI, welfare, etc,........... Your friend may be able to get the money back.

It may require seeking Legal Assistance, but definitely worth checking into.

[poorme]

Best to try to put exempt funds, as described herein, into a separate account from earnings. Once they become co-mingled it's hard to prove how much is what unless you keep exhaustive records.

For example, have the ssdi or retirement check directed into a savings account, not checking. you can always transfer fundz to checking as they're needed.

[tradewiz50]

Your at the mercy of your creditor's when they have a judgment in hand. If you don't file for bankruptcy then expect to loss everything there judgment entitles them too.