Help! Garnishment questions, bank info

[twinsplus14me]

We are trying to scrape together the funds to file 7. It is my understanding that the creditors can get judgements/garnishments all they want until we've actually filed.

We got a writ of garnishment in the mail today showing they are going after an old bank acct which we closed at least a year ago.

I'm sure it won't take them long to find our new acct. that actually has a little bit of money in it.

Problem is, my husband's paycheck (our sole source of income) is direct deposited. Should we have it stopped and just cash the check at the bank it's drawn on?

Our old bank (closed acct) that they are trying to garnish, is the SAME bank his paycheck comes from. Just my luck that his employer banks there now.

If they do garnish his acct, how much can they take out of the acct at once? The total bill is around $1200. His payroll is only $1k every 2 weeks. We have 3 little ones to take care of and will lose our housing if we can't pay our rent.

What should we do????

[HHM]

The safest course of action is to stop the Direct Deposit.

One thing to note, unless you have applied for credit and listed your current bank account in a credit application somewhere or made any payments from the new account, odds are, the creditor may not know about your new account (it is actually harder than you think to track down where someone banks).

[twinsplus14me]

We did use it to pay our mortgage by phone....

Before we sold our house, we did use the new checking acct to pay a few payments. Does this count? How do they find out where you bank?

I just realized what they are doing is really stupid. They have been paid before from the NEW acct, and haven't tried to garnish it, but are going after old account, why would they do that?

[treehugger1]

I'm assuming that a creditor or CA will always go after an account that you used to pay your bill in the past.

They can find newer bank accounts by running a credit check or running a check with chexsystems. They can see any finanical institution that reported to either of these. While you may not have actually opened an account, this certainly narrows down the field for them.

If possible, you can open a variety of accounts that do not do chexsystems checks. These are often associated with a "prepaid" visa or mastercard card. Many of them allow direct deposit to the card. Some have a routing number and account number associated with them and operate much like a traditional banking/checking account, allowing online bill paying, etc. These are quite difficult to trace, as no credit check or chexsystem reports are generated.

The only way they would show up is if you were called into a "debtor exam" and asked for any bank accounts. I'm not sure that a prepaid visa or mastercard counts as a bank account, so you might not have to give up the card number under an examination. Even so, you could quickly close the account after a debtor exam and pull your money.

While I don't have any personal experience yet, I've heard that once a creditor/collection agency levies/garnishes your account, most other creditors can only get in line.

I would definitley think moving to a paper payroll check is the best course of action. If your employer requires a direct deposit of your paycheck, you might want to open up an account with one of the prepaid debit cards out there.

You might want to google bank accounts and chexsystem problems for options. While you might not have any issues with chexsystems, many banks pull your chexsystem report when you open an account. Any creditor/collector who can check your report will see which banks you applied to for a checking account.

[HHM]

They can find newer bank accounts by running a credit check or running a check with chexsystems.

That is true, but the only way bank account info gets reported on a credit report is if the debtor applied for credit and listed the bank account, and the only way they get into chexsystem is if the debtor defaulted on a bank account. What surprised me, having seen internal credit files from credit card companies, they don't actually make note of the bank from which the debtors check was issued (maybe they do now, but it is not part of their standard record keeping).

[roki]

Are debts in both of your names or under one of the other? If any of you had nothing to do personally and legally with that debt and you have a joint account they cannot freeze it? because one of the other does not owed the money. Now in regards to liens a house is different the could lien because in a common law marriage the house belongs 50% husband 50% to the wife. Make sure your husband check is not direct deposit. Also so you know if you had answer the lawsuit or complaint i do not know in which state is this and went thru the due process you would not be in danger or having this done to you. In order for a creditor to get a garnishment or Lien or freeze and account the must show plenty of evidence that they contacted you several times by phone and Certified letters and in most states a lawsuit has to be issue in which you have the legal right to answer. A legal trick on all of this is when the creditor files that you imediately file a Motion to dismiss on the grounds that you do not recognize that debt or most common you disagree with the amount collected. This makes creditors Furious because you are stalling the Judgment which they need to go after your assets. It sounds frivolous but this gives around 60 more days or maybe more depending court traffic. Also if you have a joint account and the debt is not jointly then go to your bank and have 2 separate accounts if your husband has the debt let him have a small account and your saving could be put in your name or sons and daughters age. Then you get a lawyer so you could explore how to handle this if either with chapter 7 or 13.

[roki]

Let me tell you another thing people don't know about additional people like wifes, sons and daughter added in credit card account just as additional card holders. There credit is not use to get the additional card they do not consent to be cosignee but neverthless if you gave your son or daughter and additional cc under you account for college and emergencies and at this moment that cc is in collection and they are threatening to destroyed your credit they also go after your sons and daughter credit too. Also if you go Bankrupt credit card companies are allow by law to go after the additional card holders if they could proof they used the card in question???? So you may go bankrupt and had that account discharge in your name and your son or daughter or maybe your wife are liable for collection actions. In those cases i think beause i saw my lawyer do it the court provides a mechanism so you include all the accounts under the main one. Every individual card end in different numbers so you should include them so your son and daughter or wife don't have legal problems. It is very important that you include everything when you file sometimes is better to put more than actually is just in case the credit card company files advisory complaints claiming this or that???? write Estimate well your lawyer will tell you.

[twinsplus14me]

[FreshLikeADaisy]

Your story sounds so similar to mine, except I don't have a hubby working overtime to support me, so it all went downhill much faster, and I got foreclosed instead of sold. I have so been where you are now. "Really, really ugly every day existence." I so know exactly what you're talking about.

I don't know if you're still trying to pay all your bills, but if you know you're going to file Chapter 7, stop. Pay your utilities, housing, and car. Forget the unsecured stuff (like credit cards, medical bills, whatever won't get you put on the street for non-payment) and use that money to save for your bankruptcy. You are already wise enough to stop the direct deposit and go cash only for a while; it's a pain in the butt but at least you won't have to worry about checks bouncing and desperately needed money disappearing.

The creditors who are going to go after judgements and garnish are going to do anyway at this point: it's not like you can make a little payment and stave that off for a while, so don't waste your money trying to appease them. Save for the bankruptcy instead. You have to get under the protection of that automatic stay as quickly as you can.

Also, I read another post on this forum somewhere recently where the poster's wages got garnished, but she was able to have that reduced to almost nothing by filing a claim of exemption. I'm not sure what's involved in that, but it's worth looking into. (Here's the link to the thread, look for a post by jennordhavn: http://www.bkforum.com/showthread.php?t=19601)

As for me, I am filing pro se because I don't have a rat's chance in hades of getting money together for an attorney, but I'm pretty good at legalese and paperwork so I'm comfortable with it, especially since most filers only have to go to court once and that's it. If you or your husband have those skills, you could consider it too. I suggest it because from what you wrote, you don't have a lot left to lose and so the risk of filing pro se is much less than that of someone who is trying to save a house or other assets.

As I said, you may already be doing all these things, but if not they're worth looking into. I wish you all the best, and yes, it really WILL get better. Good luck!

[FreshLikeADaisy]

Hey, I did a little internet searching for you on filing a Claim of Exemption to granishment. Here's something from Legal Aid Services of Oregon; it basically says that you get the papers to file such a claim when the garnishment takes place, and it gives some (incomplete) info on how to fill them out. I'm still looking for better / more complete info for you, but decided to go ahead and post this just in case you're hanging out waiting for answers.

http://www.lawhelp.org/program/768/RTF1.cfm?pagename=Claim+of+Exemption

and here's the list of exemptions it refers to (apparently you pile up as many as you can conceivably qualify for in order to whittle the granishment amount down as low as you possibly can)

http://www.lawhelp.org/documents/44391BANKO%20EXEMPTIONS%20PAGE.pdf

[FreshLikeADaisy]

Okay, those two pages were an excerpt of a longer pdf booklet; I looked through it and I think you should too: there's a lot of info in there specific to Oregon and your rights, and the whole Claim of Exemption thing.

If you go to http://www.oregonlawhelp.org and click on the "Consumer" icon, and then click on "Debt Collection, Garnishment, Repossession", the booklet as a whole is available as the second link from the bottom of the page, called "Unpaid Consumer Bills".

I wasn't able to give you a direct link to the pdf file because of the way the web page is constructed; you pretty much have to navigate to it, but it's easy enough to find.

Still looking, but that should *definitely* get you started in the right direction...

[FreshLikeADaisy]

Here's something I found on Yahoo Answers about what to do when your check has already been garnished, you filed your Claim of Exemption and the court approved it, and now you want your money back from the creditor. I always take Yahoo Answers with a grain of salt, but this looked like good advice. The key thing is knowing what you need to do and acting FAST.

http://answers.yahoo.com/question/index?qid=20070825152829AArgc5i

I also saw something for Small Claims Court in Oregon that mentions that the actual form for a Claim of Exemption is delivered with the actual writ of garnishment, and advises that both are available at office supply and stationery stores. I mention this because if it were me, I'd want to find the form *today* and make sure I knew how to fill it out.

https://www.ojd.state.or.us/uma/documents/SmallClaimsProcedures_001.pdf

Here is a link to the actual law. I didn't get too far into it, except to note that the time limits involved for filing and serving claims of exemption are *very* short, all in the less than 30 days range. One item of particular notice was that a bank, upon receiving a writ of garnishment, only has to hold off for 15 days: if they do not receive a claim of exemption within that time, they yank the money and then you have to try to get it back from the creditor, even if your claim of exemption is approved.

http://www.leg.state.or.us/99orlaws/sess0300.dir/0303ses.html

Well, I have to run, but it looks like your garnishment situation isn't as bleak as all that. Your VA disability is almost certainly exempt, and I have a feeling that once you start looking through that list of exemptions in the Oregon Legal Aid "Unpaid Consumer Debt" booklet, you'll be able to minimize their claims considerably. You just have to ACT FAST!

Good luck and best wishes!

[twinsplus14me]

Wow, thanks for all the links. I have read quite a bit but still have questions.

Has anyone filled out the challenge to garnishment form? It did come with the paperwork. According to everything I've read, you file it with the court after you get the writ. It says we have 120 days to do it. I will of course do it right away.

They can still take the 25% of his wages which is really going to hurt us. I could care less if they take clothing and other stuff. We have 1 used car that's not worth taking, and one that Citi owns that we are upside down on. Other than that, we don't have much.

Apparently, if you have anything extra, they can have the sheriff take it for a sale. Has anyone had that happen? How long did it take? I know I've seen those sales before with cars, motorcycles, etc.

[EveryDayAdam]

Wow, thanks for all the links. I have read quite a bit but still have questions.

Has anyone filled out the challenge to garnishment form? It did come with the paperwork. According to everything I've read, you file it with the court after you get the writ. It says we have 120 days to do it. I will of course do it right away.

They can still take the 25% of his wages which is really going to hurt us. I could care less if they take clothing and other stuff. We have 1 used car that's not worth taking, and one that Citi owns that we are upside down on. Other than that, we don't have much.

Apparently, if you have anything extra, they can have the sheriff take it for a sale. Has anyone had that happen? How long did it take? I know I've seen those sales before with cars, motorcycles, etc.

The sherriff's sales are EXTREMELY rare...Yes, they can, but they generally only happen on very large debts...and then you have to own something of significant value.

[FreshLikeADaisy]

Has anyone filled out the challenge to garnishment form? It did come with the paperwork. According to everything I've read, you file it with the court after you get the writ. It says we have 120 days to do it. I will of course do it right away.

You do file the claim of exemption with the court, but I also saw indications that once it is approved, you take a copy of that to the bank or other financial institution asap. You do this in order to prevent a garnishment from taking place if it hasn't already, or if it has already started and you want it stopped. The creditor has no reason to inform them, or to do so in a timely manner. I get the impression from the way it is all written that the burden to inform the financial institution, employer, whatever of the successful claim of exemption lies with the debtor.

In a way, this works well for you: if garnishment is imminent and unavoidable, but you can whittle down the garnishment amount to nothing using the Claim of Exemption, it's almost like being garnishment proof. Unfortunately you may have to repeat the process for each garnishing creditor, but once you know what to do it should be just a matter of taking the form down to the courthouse, etc.

All this is so good to know -- I had no idea there was any remedy for garnishments...