Exempt funds

[GoingDown]

I'm adding another link to similar thread, about a credit union's response to exempt funds...

http://www.bkforum.com/showthread.php?68632-Got-this-e-mail-back-from-my-Credit-Union-about-protected-funds

[2scared]

I just talked to a customer service rep on the phone yesterday, who knew nothing about this new federal law of May 1st protecting SSDI funds
of 60 days. I guess I'll have to get to my bank an hour or so away (get direct deposit of SSDI) and just started getting it a few months ago.
I'm having a hard time getting any paperwork from a third party collections that never sent me paperwork, but pressured me to pay on the
phone a one time payment after sending me an email with the terms. This co, I've read, has had tons of complaints of taking out more payments,
but I didn't know to google it until after the fact. The payment went through and now they won't answer my phone calls or return my messages!!
The customer service rep said I'd have to just dispute it,if they did attempt to take out more and then close my acct. which I hate to do as
I've had it a long time in good standing. Since I've started getting SSDI, I have not had any other type of money go in, not that I had much
for quite awhile.

[alltappedout]

Thanks WhatMoney for posting the May 1 Federal regs link and for spelling out what it does. I'm just entering into BK Ch7. Had a credit union account raided of $27 and charged with $35 processing fee. Not a direct deposit account, but am going to open a new SSI direct deposit account with another bank and now know how to do it right to protect myself from further $eizures. Very helpful info, stuff the lawyer wasn't super clear about!

alltappedout

[2scared]

That's really rotten that they went in to your acct and then you were charged by the
bank, too. Not supposed to happen, according to that new ruling and the bank can't
charge. Was this after May 1st? Just curious..

It seems my bank, which is limited to mainly my state and a few other locations, has no
idea about the new ruling in regard to SS. I'm glad to have heard of it, but wonder how
easy it is to sign up with a new bank when my credit has been affected.

I kept calling the collection agency that I had take the money out (a one time amt) and
the collections manager said they could not send me an email confirming payment until
30 days after the electronic payment came out....yet, he said the original creditor is
usually good about reporting it quickly to the credit bureau's, within 3-7 days. This is
the collection co., Valentine and Kebartus, that has had so many violations and a bad
rep. Dealing with another collection firm that appears to be more professional, as I did
get an email confirming the 1st payment, but I still feel nervous about them as they have
gone into people's accts without permission by saying they weren't paid enough or then
asking for the balance later. Those reports are older, however, and perhaps they are
playing it more professionally.

2scared

[alltappedout]

Hi 2scared - yes it was after May 1, but the account was not for direct deposit of SSI, so not protected. I've filed a claim with the sheriff's office and we'll see what comes of that. Next, I will open a new Soc Sec direct deposit account, and I will keep only SS direct deposit funds in the account and less than 60 days of deposits. I will write a letter to the bank manager stating that the account is SSI direct deposit account and have the manager sign a copy of the letter.

Advice I have gotten from fellow posters. I don't think they check credit to open an account and the gov't. is good for the money, so I don't anticipate any problems. Just need to have the letter on file that it is indeed a "SS direct deposit account only"; that no other funds will be deposited and that it is protected.

best wishes
Ali

[2scared]

I imagine you are going to a different bank to open a new acct; course with
your letter and keeping less than 2 months of SS should be enough. Let me
know how it all works out. The two CA's I'm working with haven't attempted
any nonauthorized withdrawals and the last cc's CA quit bugging me for
awhile, but I'll have to answer the phone soon. I live with other people who
have their coll calls, too, so it's fairly constant. I wonder if you can get
your credit report every yr by calendar year or is it 1 yr in length. I'd like
to find out if the one creditor reported payment by now.
Good Luck!
2scared

[GoingDown]

I am going to add another link here about pre-paid debit cards. Although they are not technically exempt from being garnished, they are safer than checking accounts...

http://www.bkforum.com/showthread.php?73014-Pre-paid-Moneycard-from-Walmart&p=543062#post543062

Here is a quote from that link...

"And now to quote the info from HHM's link

http://www.**********.com/blog/2011/...-be-garnished/


:

Question:

Can pre-paid debit cards with Visa or MasterCard logos be garnished by a judgment creditor?

Answer:

Actually, YES. I had done some Google’ing on this topic and most articles were rather vague and the answers seemed more like guesses. So, I decided to go to the source. I called one of the major players in the Pre-Paid Visa/MasterCard Debit Card industry and spoke to a high ranking individual (that sounds too Woodward and Bernstein to say it like that, but oh well).

Can pre-paid debit cards be garnished, yes; have pre-paid debit cards been garnished, yes. Is a garnishment common, no. The average daily balance on these cards is around $100; so from a practical standpoint, pre-paid debit cards are not an attractive target and there are other obstacles which will discuss below.

How can these cards be garnished? In reality, these pre paid cards have an underlying account that is underwritten by a bank and that account is FDIC insured. As such, the account is linked to a specific individual. So, if the card issuer received a garnishment order, then the pre-paid card can have the funds withdrawn and paid over to the judgment creditor.

Pre-paid debit cards are different than gift cards. Gift cards, even the Visa or MasterCard gift cards, do not require personally identifying information. So, gift cards cannot be garnished by sending a garnishment order to the issuer. However, if you have a $100 Visa gift card in your wallet and show up to a post-judgment debtor’s exam, the creditor attorney can require you to turn it over and many collection attorneys will have a mobile phone application to accept credit card transactions on the spot.

However, there are two other hurdles to a judgment creditor garnishing a pre paid debit card. (1) There is no easy way for the judgment creditor to find out you have such a card, and even if the judgment creditor could find it, given the usual low balance on these types of cards, it is generally not worth the cost to issue the garnishment order. (2) The issuing institution may not have a registered agent within the state to accept service of a garnishment order. In general, a company does not need a registered agent in a state to offer a product (like a pre-paid debt card). However, given the nature of this industry, many issuers do have registered agents because a license is required to be able to transfer funds. The company I spoke to has registered agents in about 40 states.

Why does this issue even matter? For me, it was one of those questions that made me go, hmmmmm! However, some people really let their debt get seriously out of control before taking action and sometimes need to take steps to buy time, have money to live, and one tactic available is to stop using bank accounts. But some people are not entirely comfortable with going to all cash (for whatever reason) or may not be able to go all cash. So, one option is to use pre-paid cards to pay for necessary day to day expenses. So, the idea with this investigation was to assess the true risk of using pre-paid debit cards. The answer: is there a garnishment risk, yes; has it happened in the past, yes; is it likely, probably not."

The key to remember here is this: the judgment creditor will probably never know that you have a pre-paid debit card UNLESS YOU TELL THEM. This is why you should never talk to debt collectors on the phone, but if you do, please don't give them any information about stuff like this. They will just turn around and use the information against you.

And as a rule of thumb... never keep more money in any account-- including a pre-paid debit card-- than you can afford to lose once someone files a lawsuit against you. Use them for convenience to pay certain bills online, if you so choose, but don't keep huge balances on them.

And always keep in mind that there are other alternatives to use to pay for things online. For example, you can buy Amazon gift cards at many grocer stores using cash, for no fees, and then use them to buy things online. You don't need a debit card or visa card to do that.

[bellessima]

I have not been served, however, this has been filed in the courts here in AZ. At this time can I negotiate payment with NCI /Chase or how do I proceed. I also need some help with responding to the 20 day letter. Knowing the process would be extremely helpful from those who have been served by this company. NCI/Chase
Thank you for any help with this stressful matter. I have no assets just my paycheck.

[GoingDown]

I have not been served, however, this has been filed in the courts here in AZ. At this time can I negotiate payment with NCI /Chase or how do I proceed. I also need some help with responding to the 20 day letter. Knowing the process would be extremely helpful from those who have been served by this company. NCI/Chase
Thank you for any help with this stressful matter. I have no assets just my paycheck.

You have nothing to lose but 25% of your paycheck, and anything in your checking account / savings account, etc.

What are you hoping to accomplish by fighting this in court? It is very unlikely you will actually win against a creditor or junk debt buyer in court. Arizona recently raised the court costs, so it gets very expensive to file written answers in Arizona courts. If you need to buy yourself some time before you file bankruptcy, I would go to a local paralegal and have them draft a written answer to the lawsuit and a motion for continuance (to buy some time), and then file it with the court.

If you want information about fighting them in court using rather unorthodox methods, send me a PM and I will send you a link to the information.

[Scarlett1234]

I just saw this . If a person is judgment proof and the creditor or collection company decide to sue him , since the person do own the debt but cant afford to pay , should he just respond to the lawsuit without hiring a lawyer because it would be waste of money and he cant win if the debt is valid? But if he doesnt win , does he still have to pay for the creditors legal fee , court fee caused from this law suit ? I dont know how this works , I have heard people saying if you are judgement proof ,you dont have to worry about anything ,does that mean if he lost when the creditor sued him ,he wont be forced to pay for the legal fee ,creditors attorney fee because he has no means to pay?

[GoingDown]

Adding another link to this on-going discussion about pre-paid debit cards...

http://www.bkforum.com/showthread.php?75257-Is-having-a-reloadable-personalized-debit-card-the-same-as-having-a-bank-account

[GoingDown]

Here's another link about a similar discussion about pre paid debit cards...

http://www.bkforum.com/showthread.php?75502-Wal-Mart-money-card-a-way-to-dodge-a-judgement

[GoingDown]

And yes, another link about the same topic...

http://www.bkforum.com/showthread.ph...aid-Debit-Card!

[GoingDown]

I have some new information to add to this thread.

My parents know how I refuse to get a credit card or a checking account with a debit card because of all the fees, and my issues with credit in general, so they send me "gift cards" in the mail, such as Amazon gift cards which I then use at Amazon to buy whatever I want, or they send me McDonald's Arch Cards, and Jack Ca$h cards to use at Jack in the Box, etc., well lately they've been sending me pre-paid Visa "Gift Cards." These things are not re-loadable. They do not have any association with your name, your social security number, your date of birth, etc. They work just like a credit card when you purchase something at the store, etc. There are no fees after they are purchased, and the latest one I'm using doesn't expire until 2021.

So, here's where I'm going with this.... If you needed a safe place to store your cash, and you didn't like the idea of stuffing your cash under your mattress, you could buy these visa non re-loadable gift cards and there is simply no way a debt collector would ever know about them unless you told them about them.

This is taking it one step further, but in the instructions that come with them, it says "If your card is lost or stolen, call customer service at ... You will need to know your card number so be sure to record it in a safe place. If funds remain in your card account, you will be sent a free replacement card."

So, you could buy the Visa Gift Card, take it home and write down the card number and the customer service number (or type it into an email and send the email to yourself), then if you just wanted to keep the money safe from creditors and thieves and fire until the year 2020 (or whenever you needed the money), you could call them and tell them that the card got lost and they would send you a new one. I admit that's probably taking it too far, but it might be something to consider if you were afraid that creditors would otherwise get your money, and your afraid of storing the cash at home because of thieves and fire, etc.

At the very least, you could get some of them, and hold them back in a safe place until you needed them, and at least you would know that money was definitely safe from judgment creditors.

The biggest drawback is that the money in them has to be spent. You can't go to an ATM at some later date and withdraw the cash in them. You have to spend them down to zero to get use of all the cash stored in them. There's no way to get cash back once you have bought them.

There is an upfront fee to buy them, but after that, there are no fees at all. So, no monthly fees for just letting them sit there unused. And of course, there is no way to go over their limit. No fees associated with that.

Another issue is that you cannot use them for recurring monthly payments, which I find strange. So, for example, if you wanted to use them to pay for your Netflix account, you're out of luck.

And if you still wanted to remain anonymous, you can not use them for online purchases, nor for telephone purchases, since you would first have to register the card online at the visa gift card website, and at that time you would have to state your name and address.

To stay anonymous, you would only be able to use them in person at stores and restaurants.

Oh, one last thing, you have to keep track of your purchases, and once you get down to the last dollar or so, you would have to ask the cashier to do a split transaction for the exact amount that was left on the card and then be prepared to pay for the rest of the amount with some other form of payment.

[GoingDown]

I'm adding this thread to this stickie. This shows what happens if you do not brace for impact from a lawsuit, if you do not judgment proof yourself as much as possible once someone files a lawsuit against you, and how much worse it can be if you happen to live a in a community property state and are married when someone sues you....

http://www.bkforum.com/showthread.php?78714-Judgment-obtained-before-marriage-are-half-the-bank-account-assets-protected

People in Arizona, a community property state, really need to pay attention to this part of that thread:

"BTW, the attorney said this in relation to my wife's share of the assets...

Although the judgment is only against you and arose from a premarital debt, they can levy against your separate and your community property, which includes your wife's accounts unless they only hold her funds that she had prior to marriage. In short, the creditor may levy against any and all community income irrespective of who earned the income or in whose account it is held. This means 100% of funds held by you or her unless traceable to premarital sources."

[GoingDown]

I'm adding this link about the dangers of using a debit card attached to your checking account... forewarned is forearmed...

http://www.bkforum.com/showthread.php?79179-Debit-Card-Fraud