Disabled Vet

[Disabled]

I am about to be sued by two banks for a total of $33k in unsecured credit debt. If a judgement is won I have been told that since my ONLY income is my VA Pension that it is judgement proof. My Pension is currently direct deposited into an ETA account. Can the ETA account be frozen by an attorney? If so, should I close the account and have paper checks sent to me?

[Bobby'sGirl]

Have you received notice of filing the suit against you?

Or are you receiving letters threatening action? The bank accounts could be frozen after a judgement until what is exempt money is sorted out.

Did you follow up with a lawyer or VA group per suggestions made to you in June?

[SinkingFast]

Hi DV!

I moved your post here as this section is more appropriate for you Q.

My brother just went thru the same thing. He had a car repo'd and the Creditor got a judgement against him for the deficiency balance. Bro draws SSDI and a small pension.

The Law in his State specifically says that income derived from age and/or disability cannot be garnished. But that did not stop the Judgement Creditor from obtaining a banking institution garnishment and siezing all funds in his bank acct. In fact, they over drew his acct.

It took hiring a lawyer and months to get Brother's money back from the Creditor. Even after all that, the attny advised that the Creditor likely would try it again. For Brother to be very careful with his funds.

Were I in your position,.......... Just as a CYA,.......... I'd close that acct after you get your disability changed over to paper checks. Line up a place to cash your checks in the mean time as well. Use cash and Money Orders to pay bills from here on.

[Disabled]

Thank You!

Thank You both for posting to help me. So far no legal action has been taken, just threats. I contacted free legal aid today and they told me to ignore the phone calls and contact them if legal action is taken. They didn't advise on moving my pension out of the ETA account and getting paper checks, but I feel like it's a Wise choice. Just seem to have a problem finding anyone that will cash the checks without wanting a King's ransom for the service! Again, Thank You both for answering my post. I Really appreciate it. Any other advice is also Greatly appreciated. I better start the process of changing over to paper checks soon I guess, because it will be Decemeber before the change would take effect.

[SinkingFast]

Wal-Mart will cash checks up to $1K for a $3 fee.

Another thought that's worked for me from time to time in the past,......... If you have a local branch of the bank the checks are written on, go there to cash the checks. As an example,......... Say it's a Chase bank acct the checks are drawn on. Go to a local Chase Bank branch to cash the checks. Generally banks will cash checks drawn on their own accts.

[GoingDown]

I can confirm what SinkingFast said-- it has happened to some of my relatives as well. Once they get a judgment against you, they can seize everything in your checking account/savings account, even if the money is supposedly "exempt." You would have to fight a costly battle in court to prove that the money is truly exempt, and meanwhile, you wouldn't have any access to it.

Whatever fee you end up having to pay to cash those paper checks is still worth it when you consider the alternative of losing everything you have in your checking account.

[Minnymouth]

The only problem now is a lot of people are required to have "direct deposit" in order to get their checks....... and some places are putting their payroll checks on "debit cards".......

The days of getting a payroll check and other checks on paper is about over..........

Just another way of "tracking" us..........

[Credit Hater]

Is an ETA some sort of a checking account?

Something I've discovered recently about checking accounts; I don't know if each state applies differing statutes, but I believe this is across the board:

Say you have a checking account and you're worried that a judgement is won against you and they can seize your checking account. One thing is this; each time they want to seize your account, they have to go through a judgement proceeding. So lets say they only get $200 the first time. Well, then they have to try again. It's not like they get a judement to seize, and then each time money is added to that account, they can seize it. They must go through proper court proceedings each and every time they attempt to seize an account.

And here's the kicker:
If you add a third party to the account, such as your child,(as long as it isn't your spouse) they do not have the right to seize that account since the other party involved is not involved with the debt.

I just found this out yesterday and I hope I wasn't mislead. After looking deep into it though, it looks legit

[SinkingFast]

And here's the kicker:
If you add a third party to the account, such as your child,(as long as it isn't your spouse) they do not have the right to seize that account since the other party involved is not involved with the debt.

I just found this out yesterday and I hope I wasn't mislead. After looking deep into it though, it looks legit

An ETA is an Electronic Transfer Acct.

http://www.dallasfed.org/ca/epersp/2002/1_3.html

Kinda like a checking acct. Kinda not.

I asked my Brother about doing just that. Having his daughter listed as the primary SSN on his acct and he'd take the secondary spot. Brother asked his attny and the attny said Nope. Doesn't work that way. The Creditor get's a Banking Institution Garnishment Order for the SSN.

Bro's attny said, any acct his SSN is on would be up for grabs if the Creditor came after his funds again. Since the Garnishment Order is issued by SSN, it can be served to any bank on any bank acct.

May just be the way their State works. Not sure there. May be different for you CH.

Bro has stopped Direct Deposit. He get's paper checks for SSDI and Pension. Cashes them, buys Money Orders for his bills, and puts the rest of his money into his daughter's acct. Daughter got an extra Debit Card which Brother uses when he wants to make a purchase at the grocery or Dept store, or needs cash from the ATM. Brother keeps his own register of his money so they can keep the money straight.

[Credit Hater]

I read it on this web site SF:

http://www.equalaccesstothelaw.com/home.php?id=191

Garnishments, in most states, are valid until the judgment is satisfied. But with bank levies, each time a judgment creditor wants to tap into your bank account, they must file a new levy. While this may be time consuming for the judgment creditor, it is well worth it for them to pay the filing fees each time. You can change several patterns to reduce your odds of having your accounts seized. A judgment creditor cannot levy a bank account that has an uninvolved party listed on that account. If your bank account is being targeted and you have no desire to open a new one then consider adding a child on your account as a trust or co owner. Once a third party to the debt is added to that account, it throws a wrench in the judgment creditors plan to seize your funds. If a judgment creditor knows your bank account number then they will continue to target your account until the debt is satisfied. Adding a trust to your account and then notifying the judgment creditor that they are seizing an account with a third party on it should stop the levies unless of course that third party is your spouse.


I'm going to look into this more because this site seems pretty legit. Actually, I'm about to start reading up on collections, try to find some cheap books and web sites on how they operate and can "legally" do. I've read and learned so much about bk, now I want to learn about the other side, "collections". It helps to know what all they can and can't do and see if I can uncover some sneaky tactics.....just adding a little more artillery to my collection

[GoingDown]

Once again, you're hoping that the corrupt collection agency/collection attorney will play fair, but it doesn't usually work that way.

They will garnish the account, seizing both your money and the third party's money, and it will be up to you and the third party to dispute the matter in court, involving legal costs, a lot of time, and effort, and there's a good chance you will lose in court because they typically side with the collection attorneys.

It's not worth it.

And as far as them not offering paper checks, in most cases, if you demand paper checks, they will do that for you. It certainly is worth the effort to at least try to get paper checks whenever possible.

[johnd]

Just joined and after reading messages from moderators and members this is a very friendly place to be. I am about to declare bk.

Now about the VA checks. The only entity that can seize your check is the US Government. Even a court order is not valid unless it is for money owed to the US Government as an example the IRS. A statement to this effect is on the award letter your receive from the VA each year for the COLA increase.

If your account is frozen go to the bank bring your letter, not that you have to but bank personel are ignorant and need to see it in writing which is common knowledge that a banker should know anyway but don't. Have the person call their legal department to verify the law and they have to restore your account and credit the debited money back to it. The people in the branches are stupid so insist they contact legal. Bring your cell phone because if they do not call your local VA office and the VA will read them the riot act.

I know this post is from 2006 so I hope it may help someone receiving VA or SS benefits.

[lrprn]

I know this post is from 2006 so I hope it may help someone receiving VA or SS benefits.

Welcome to the forum, johnd. As a new member, please review the forum rules posted at the top of each forum area. One of those rules is to not post to threads that have been inactive for more than a few months.

Your information is helpful, but in the future please start your own new thread to share it rather than opening an old thread like this one. Thanks and again, welcome - glad you found us!