What the #($*#*????

[bktek]

I called my checking account help-line yesterday to check my balance and it was (MINUS)6,245.96. After calling the bank, I found out that CAPITAL ONE had attached a garnishment to my account. They referred me to the clerk's office of the law firm involved. I explained to the lady that the account was being used exclusively to deposit unemployment insurance payments -- I've been unemployed for almost a year -- and that those funds are exempt from collections. She then told me to call my bank back and explain to them that the funds were exempt. I called the bank again and they referred the matter to their legal department. I checked the balance again today and it is now ZERO. They took the entire $1300 of unemployment funds I had deposited in the account.

I had received a letter informing me that a civil lawsuit was initiated because of the debt, but to this day I have never been served or mailed a summons informing me of a court date. When I questioned the law clerk about this, she said the "BANK" had been served.

I'm preparing a CH7 BK filing, but haven't got the paperwork completed. Is there any way to get my unemployment money back now? If not, is there any way to get it back when/after I file my BK petition? I've been waiting all day for a return call from the bank's "legal department," and I'm starting to get nervous!

[treehugger1]

OK, first I just have to say this for other folks' benefit. You probably did not see this coming. On the other hand, you probably defaulted on the CC account and should have taken precautions to protect your bank account since at the time you did not file for BK (This would have protected you.) End result for others is that if you do not file for BK, default on accounts, and have an open bank account, it is probably in your best interest to close the account and open a new one.

To the matter at hand now. Were you sued, or did C1 simply debit your account given they had the account number from previous transactions you may have made?

If you have BK attorney, then you should speak to him/her immediately.

You might also be able to petition the court and file some type of declaration that the funds in your account were exempt. You might need to have proof of this. Such proof could include a direct deposit from the unemployment agency. If you simply deposited a check, the burden of proof will be harder for you, and potentially expensive to counter against.

You should go down to the courthouse and look up your name under any civil proceedings and request to see the file. Since most civil suits are a public record, the clerk should be able to get this for you. Perhaps you were sued and you didn't realize it. Or, perhaps you were not properly served and a judgment was obtained. Either way, it will be your responsibility to fight the bank levy.

It does sound as if the bank may have a department that will look into the matter for you. However, in my state, it is up to the defendant to claim their exemptions after judgment (or declare exemptions prior to judgment.)

In the meantime, I do hope you have closed this account and opened another one at a different bank.

Just opinions here.

[BigJohn]

I called my checking account help-line yesterday to check my balance and it was (MINUS)6,245.96. After calling the bank, I found out that CAPITAL ONE had attached a garnishment to my account. They referred me to the clerk's office of the law firm involved. I explained to the lady that the account was being used exclusively to deposit unemployment insurance payments -- I've been unemployed for almost a year -- and that those funds are exempt from collections. She then told me to call my bank back and explain to them that the funds were exempt. I called the bank again and they referred the matter to their legal department. I checked the balance again today and it is now ZERO. They took the entire $1300 of unemployment funds I had deposited in the account.

I had received a letter informing me that a civil lawsuit was initiated because of the debt, but to this day I have never been served or mailed a summons informing me of a court date. When I questioned the law clerk about this, she said the "BANK" had been served.

I'm preparing a CH7 BK filing, but haven't got the paperwork completed. Is there any way to get my unemployment money back now? If not, is there any way to get it back when/after I file my BK petition? I've been waiting all day for a return call from the bank's "legal department," and I'm starting to get nervous!

I would check with Legal Aid.

This was a hard blow. I hope you don't have to eat crow.

[bktek]

treehugger, I received a letter stating that a civil lawsuit had been filed, but as I said, I was never served or otherwise notified of a court date. I had every intention of showing up at court with my unemployment records/stubs. I haven't had any income from any source other than unemployment for almost a year. I was waiting to hear back from the bank's legal department before I closed the account. I was hoping they would restore the funds.

BigJohn, yeah, legal aid seems like it may be my only recourse. The odd thing is that I had never paid CAP ONE or any of my other credit cards out of that account. I'm baffled as to how they dug up the account info.

[jacko]

That sucks.. In anticipation of crap 1 doing the same thing to me, I withdrew 2/3rds of my funds from my new checking account yesterday in case. I closed down my previous checking account three months ago that Crap 1 has on file.

Decided not to respond to Crap 1's summons since I have no defense to it. Well see what happens next. I am unemployed, but do not on unemployment, but receive some dough from parents to keep the lights on until the foreclosure is completed. Have adopted 'going down' tactics of remaining silence and not talking to the creditors. The less they know about me, the better until I file BK sometime next year.


[QUOTE=bktek;324793]I called my checking account help-line yesterday to check my balance and it was (MINUS)6,245.96. After calling the bank, I found out that CAPITAL ONE had attached a garnishment to my account. They referred me to the clerk's office of the law firm involved. I explained to the lady that the account was being used exclusively to deposit unemployment insurance payments -- I've been unemployed for almost a year -- and that those funds are exempt from collections. She then told me to call my bank back and explain to them that the funds were exempt. I called the bank again and they referred the matter to their legal department. I checked the balance again today and it is now ZERO. They took the entire $1300 of unemployment funds I had deposited in the account.

[treehugger1]

bktek, In some states service by mail is appropriate. Service does not necessarily guarantee a court date. In general, you must provide or motion to set the ball rolling.

It is quite strange that they debited your account when you never used hte account to pay them. There is a connection somewhere...

I hope you didn't take my post as a diatribe against you. But, lately there have been plenty of posters on this forum discussing whether or not to keep their bank accounts. In my limited expereince and in my opinion, why take the risk.

Let us know how this turns out. In addition, please post any steps you take that may get your cash assets returned to you.

Best to you.

[bktek]

treehugger, no offense taken. I appreciate all of the help/advice I get here on the forum. After waiting all day for the bank's legal department to call me back, I finally called them again ... and got voicemail. I'll try to reach them them again tomorrow. Too tired/frustrated to deal with it any more today.

I'll keep this thread posted with any information I receive.

Thanks again.

[debtprison]

If the account was fairly new for example many banks will do a credit inquiry prior to opening the account. That lists the name of the bank on your credit report. They can then use that to find you.

I have a savings account with $26 in it and another checking account with $6. They can go ahead and levy them if they like, it will be a waste of their money.

[Bell30656]

As a bank Capital One can also check CHEX Systems. I'd bet that your bank ran you through Chex Systems and/or a credit check before opening your account. If you can prove that the money was exempt funds you will probably get it back but it will be a while. They are quick to take money but slow to return it.

For now file the appropriate objections but write the money off in your mind. Then when it comes back to you it will be a windfall. Keep in mind that your bank is an innocent party in this. They don't want to give up a customer's funds because they know they will upset you their customer but they have no choice but comply with court orders. A lot of times if you can calmly work with someone at the bank they can point you in the right direction. I recommend a sit down with someone at the bank maybe in the morning with a cup of coffee, most banks still have free coffee and they aren't as busy in the mornings.

[treehugger1]

Good advice. it is important to keep in mind that when a bank receives an order to garnish/levy, it is a court order or comes from an officer of the court. If the bank does not not comply, then they are in violation of the law. I don't know of any state that requires financial insitutions to check whether or not a consumer's funds on deposit are exempt. Most banks are going to bow to a court-sanctioned order.

I forgot about chexsys. The last account I had was not reported to chexsys, nor did they pull a credit report. I refused to sign any documents allowing this, and in the end the bank gave me a debit account with an ATM card that could be used for PIN transactions or cash withdrawals. I don't know for certain, but I've heard that many banks, (Chase, Wells Fargo, etc) may have such "second chance" accounts available. In fact, given these economic times, there is no reason they should not offer such accounts. While there may not be overdraft protection available, money in the bank overnight is always beneficial to the bank's commercial paper strength.

[catleg]

recovering garnishment as a preference impairing exemption

I found some interesting stuff here that may be worth further investigation.

Avoiding the involuntary transfer of property in which the debtor could have claimed an exemption

The bankruptcy code takes the idea of assuring the debtor of the right to exempt property a step further and allows the debtor to recover property that a creditor has taken possession of by garnishment, for example, before the bankruptcy is filed.

If the debtor could have claimed that property exempt if it had not been garnished and the transfer took place within 90 days of the bankruptcy filing, the debtor can sue in the bankruptcy court to recover the property. 11 U.S.C. 522(h).

However on this page it is noted that:

Further, the debtor may be able to recover from the creditor funds garnished in the 90 days before the bankruptcy case was filed, as a preference. (My experience is that preference actions over sums this small are seldom economic, however.)

[frmrdwn]

How long from the time you stopped paying until your found your checking account garnished? Cap 1 is not happy with me either.

I called my checking account help-line yesterday to check my balance and it was (MINUS)6,245.96. After calling the bank, I found out that CAPITAL ONE had attached a garnishment to my account. They referred me to the clerk's office of the law firm involved. I explained to the lady that the account was being used exclusively to deposit unemployment insurance payments -- I've been unemployed for almost a year -- and that those funds are exempt from collections. She then told me to call my bank back and explain to them that the funds were exempt. I called the bank again and they referred the matter to their legal department. I checked the balance again today and it is now ZERO. They took the entire $1300 of unemployment funds I had deposited in the account.

I had received a letter informing me that a civil lawsuit was initiated because of the debt, but to this day I have never been served or mailed a summons informing me of a court date. When I questioned the law clerk about this, she said the "BANK" had been served.

I'm preparing a CH7 BK filing, but haven't got the paperwork completed. Is there any way to get my unemployment money back now? If not, is there any way to get it back when/after I file my BK petition? I've been waiting all day for a return call from the bank's "legal department," and I'm starting to get nervous!

[backtoschool]

In some states, especially ones which use a Marshall for enforcing judgments, the creditor doesn't need the bank account number to levy your account, they only need to find out that you have an account at a particular bank and then they can file paperwork that will levy all accounts there.

NYC works this way. The Marshall can simply call all banks in the area, and find out if you have an account there and then send the paperwork. They don't need the account number.

That is why a lot of people get checking accounts in a different state than where they live. It is harder to trace by this type of method.

[BigJohn]

In some states, especially ones which use a Marshall for enforcing judgments, the creditor doesn't need the bank account number to levy your account, they only need to find out that you have an account at a particular bank and then they can file paperwork that will levy all accounts there.

NYC works this way. The Marshall can simply call all banks in the area, and find out if you have an account there and then send the paperwork. They don't need the account number.

That is why a lot of people get checking accounts in a different state than where they live. It is harder to trace by this type of method.

Interesting point.

[BigJohn]

To the original poster:

Your bank passes information to other banks, etc. They could have gotten the information thru this route.