Question about being sued

[freefall]

If a creditor or debt collection agency sues you and they get a judgment, can they garnish your bank account? I don't have a job. Supposedly in my state, they can't garnish my wife's military retirement, but can they order your bank to send them whatever's in your account?

Can they put you in jail if you don't pay your creditors?

[lrprn]

If a creditor or debt collection agency sues you and they get a judgment, can they garnish your bank account? I don't have a job.

The short answer is if you have a sizeable amount of non-exempt cash in the account and if the account is individual not a business account, then yes, it's possible. (Exempt funds in most states include up to 75% of wages, public benefits, retirement plans (including military retirement), and insurance proceeds.)

If the account you mention does contain non-exempt funds, then if the creditor wins a judgment against you and knows or finds out the name of your bank, the branch, the exact name on the account, and the account number, the creditor/agency can demand that the bank turn those funds over to pay the judgment.

If a creditor or agency illegally goes after the money in your account that is exempt, it is up to you to object in court and prove that the money came from an exempt source. Getting the money back can take months and usually requires a lawyer to make it happen.

The problem gets even murkier if you mix exempt and non-exempt money in the same account and then can't prove that the exempt money taken by the creditor or agency came from the exempt source.

So yes, non-exempt funds can be taken from your account after the creditor wins a judgment against you.

Supposedly in my state, they can't garnish my wife's military retirement, but can they order your bank to send them whatever's in your account?

Retirement money is safe from seizure to pay debts and judgments. It's exempt money.

However, I would strongly suggest that if you two are mingling her money with yours in the same account, you really need to get two different accounts to keep her exempt money clearly separate from any non-exempt money.

Here's the worst part. Sometimes creditors and agencies have been known to demand exempt funds from accounts and the bank just gives it over. This leaves you to sort out how to get it back afterwards. That can take months and also usually requires a lawyer to make it happen

Can they put you in jail if you don't pay your creditors?

This one is easy - NO.

But the creditors and collection agencies have every right to hound you endlessly and for years trying to get what you owe them.

[junker]

the thing to remember about debt collectors is...they dont follow the rules..no they arent SUPPOSED to take exempt income..such as military pensions or social security...BUT they sometimes DO..and make you prove in court that its exempt... which could cause a great inconvenience to many..there are many posts here of people that THOUGHT their bank accts were safe only to find their accts drained....as a rule NO you cant go to jail for not paying your debts....altho fraud is another issue....

[cynhgm]

there are many posts here of people that THOUGHT their bank accts were safe only to find their accts drained....

But you would get a notice from the court that the creditors have won a default judgement, right? It's not going to sneak up on you in the dark, I hope.

[catleg]

If a creditor or debt collection agency sues you and they get a judgment, can they garnish your bank account? I don't have a job. Supposedly in my state, they can't garnish my wife's military retirement, but can they order your bank to send them whatever's in your account?

Can they put you in jail if you don't pay your creditors?

Federal pensions can't be garnished by state courts.

On the other hand, bank accounts are probably fair game just about everywhere. You may be allowed an exemption if you can prove the funds fit into certain categories, but at that point you're fighting for your own money back. And as BB has noted in another thread, you're exposed to very high charges by the bank for their "services" during this process.

You can't be put in jail for debt, but the court can order you to disclose your bank accounts to creditors, and throw you in jail if you don't comply. Now, I'm not sure what happens if you answer an information subpoena/debtor's exam truthfully and then go out the next day and open a new bank account. :-)

[junker]

But you would get a notice from the court that the creditors have won a default judgement, right? It's not going to sneak up on you in the dark, I hope.

dont count on it... many posted here and on other sites, they NEVER even knew they had a judgement,..they went to write a check or use their debit card only to find their acct drained.... debt collectors have ways of getting default judgements even without you knowing about it..ESPECIALLY if you have moved out of a county in the last few years...they will say they couldnt locate you or lie about serving you or some other way to get judgement wihout you knowing about it... then they can clean your accts within 2 weeks of finding your bank....if you suspect possible judgements, its a good idea to keep checking the courthouse of any county you have lived in for possible legal action....i routinely check the courts of any county i have lived in for any sleazy pending claims....many mistakenly believe collectors are human and will abide by the rules...they are NOT and they DONT......