Freeze of Bank Account - Texas

[lwalk]

New to forum.
I have an unsecured loan through a Credit Union for $10,000. They filed suit and a judgment was issued against me and my soon to be ex husband. I just found out that they can freeze my bank account. Is there anyway to avoid this until I have the money to start paying them back?

Thanks.

[alicias108]

Yes..you can avoid it by paying the judgement...or filing bankruptcy. They can also garnish your wages, which is usually the first line of attack..particularly if you have no assets. Trust me..I know.

[DebtHeadache]

Iwalk, if your in Texas then they cannot garnish your wages, but they can garnish your checking account.

[DebtHeadache]

Iwalk, you may find this helpful:

Wage Garnishment and Bankruptcy Exemptions -- Texas
WAGE GARNISHMENT EXEMPTION: 100% of wages are exempt


MAXIMUM INTEREST RATE:


Legal: 6% with agreement; up to 18% without agreement
Judgment: 10%


STATUTE OF LIMITATIONS ON ENFORCEMENT:


Open Account (credit card): 4 years
Written Contract: 4 years
Domestic Judgment: 10 years (Renewable)
Foreign Judgment: 10 years (Renewable)

[lwalk]

I understand that in Texas they cannot garnish your wages, but I had never heard that they can garnish your bank account. So do they just check around until they find your bank and can they garnish it all at one time or a percentage of it. Do you know? Any information will be greatly appreciated. Thank you.

[keepmine]

Usually, they issue an informational subponea to all banks in an area asking if they have an account with your name. They'll nail everything in it up to the amount of the judgment.
All you can do is try and enter into some sort of formal repayment agreement with the judgment creditor if, you don't plan o file bk.

[woeisme]

Get all your money out of the bank. Stop all automatic deposits and withdrawls first of course. Then get your paychecks and other compensation in cash and use money orders to pay your bills. The 25cent per money order charge at Walmart sure beats losing every penny you have in your bank account!

[treehugger1]

You also want to check on Texas exemptions against seizure. Many states have a garnishment cap on wages even when they are deposited into a bank account. This can get complicated, since generally, the funds are first taken and you are left to prove they shouldn't have been.

I'm not sure how complicated Texas laws are when it comes to exemptions. In some states the BK exemptions mirror the general debtor exemptions.

[DebtHeadache]

[howdidithappen]

Debtheadache - Where did you get all that information? I'm in NJ and am looking for similiar info. Any advice appreciated. Thank you.

[lwalk]

You are not going to believe this, but I talked to the Credit Union. I was going to try and work something out with them. I asked them since there is now a judgment, what happens next. He advised that it just sits there until you decide to pay it. At some point, you will want to buy a house and it will be on your record, so you will have to take care of it. I actually asked him if they could take money out of a bank account and he said that they could not do it. I have a friend, who's husband is on the board of a different credit union and he says he has never heard of them being able to take money out of someone's bank account and as far as he knows their credit union has never done that...... what do you guys think????

[DebtHeadache]

Hi Howdidithappen. I was searching the web and came accross a good law firm site in Texas that had the information availalbe. I've done some searching for NJ and came up with the following. Copy and paste the link into your browser.

http://www.newjersey.freebankruptcyevaluation.com/bankruptcy-exemptions.html

[DebtHeadache]

Following is some important information on New Jersey state debt recovery laws including: New Jersey Statutes, New Jersey Judgments, New Jersey Garnishments, New Jersey Interest Rates, and New Jersey Bad Check Laws.


--------------------------------------------------------------------------------

STATE: NEW JERSEY

Interest Rate

Legal: 6%
Judgment: No Statutory Provision
STATUTE OF LIMITATIONS (IN YEARS)

Open Account: 6
Written Contract: 6
Sales (UCC) Contract: 4
Domestic Judgment: 20
Foreign Judgment: 20
BAD CHECK LAWS (CIVIL PENALTY)
N/A

GENERAL GARNISHMENT EXEMPTIONS
$142.50 week min. 10% of gross earnings $142.50 & over.

[treehugger1]

According to the Texas exemptions above, take note of this line:

If the wages are deposited into a bank account they are subject to garnishment. American Exp. Travel Related Services v. Harris, 831 S.W.2d 531, 533 (Tex.App.--Houston [14th Dist.] 1992).

[lwalk]

I wonder if it has anything to do with them being a credit union, because he said that they could not touch a bank account. Could he lie about that? He was not a third party debt collector. He was from the Credit Union which is in a small town in Texas. My brother, who is also on the board from a small town credit union spoke with their attorney and he says they cannot touch anyone's bank account...... I hope they are right.