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Another question regarding bank account freezing? |
I had posted about two credit cards that I haven't paid on for 5-6 years. thanx for all the replies! One I had on bank accounts. Can they freeze all your accounts, or just the amount that is owed?If they freeze your bank accounts then how are you supposed to pay them, especially if your paycheck gets deposited into your account? I spoke with a couple friends (accountants and payroll) and they said don't worry about it that the amounts are too small (980/2000). One friend has about 20K in credit card debt and he hasn't paid in almost ten years. I'm not trying to ignore this, it was a huge mistake, but at this point my credit is already bad anyways. Also, say if they decide to go after me in court, I will have notice beforehand with a time period to pay it if I want to avoid going to court? A creditor can not attach your bank account unless they go to court and win a judgement aginst you. They then must get an order to attach your bank account(s). You will get a summons to appear in court when they file the intial suit. If they get an order to attach your bank account, the bank withdraws the money and gives it to the creditor. You don't have to do anything, in fact your first indication that they did this will be when you have less money in your account. If you don't have enough for the entire judgement they will take out all of the money out of the one account and then attempt to locate another account to withdraw the amount of. This will continue until the judgement is paid. As to your friend who says don't worry about small amounts. The creditors will take you to court for any amount of money. Why? Because they can also claim the court costs and fees, so you will end up owing several hundred dollars more. However, you may not actually have to worry about this. There is something called the Statute of Limitations, this is a time limit on when you can have legal action taken against you. For Credit Card debt it does vary by state, but for most states it is in the 3-6 year range. So you may not even legally owe the money anymore. This date starts from the first month you went delinquent, and would get reset if you ever make another payment on the account. The link below gives you the SOL for each state. This does not mean that the debt goes away, it just means that they can no longer legally take any actions against you to get it. Source(s): http://www.creditinfocenter.com/rebuild/... If a creditor sends a garnishment notice to your bank, they freeze all accounts in your name. Note one thing....collection agents are really good at filing court cases, and doing a poor job of locating you and serving you court papers. They count on this, because when you don't show up in court they get a default judgment. Makes it a lot easier to win and go after your money. So don't depend on them serving you.....if you suspect they may come after you keep an eye on your local court files and see if they filed one against you. This is especially true if you have changed your address after you took out the loan. They don't make a lot of effort tracking you down, but instead just post to your "last known address". OC1999 and Studly are right on track. However, if your credit card account is at the same financial institution as your checking account, they can use the "right of offset" to take the money from your deposit account for the money you owe on your credit card account, without having to go through the courts or even a lawyer (they can't take more than is owed). The right of offset varies from state to state, but most deposit account signature cards (contracts) provide for this. If a financial institution invokes this right, they must provide notice to you. http://www.bankersonline.com/compliance/... |
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