Pre-paid Moneycard from Walmart

[mountanddo]

I'm pretty sure that I am going to have a garnishment on my check as I can't file bankrupcy for another 8 or so months. It's my understanding that the money in your bank account becomes non-exempt after 20 days so if they garnish 25% of my paycheck they then can go back and take 25% of anything in my bank account older than 20 days. As I get paid weekly this really isn't good to be able to keep money in my account to pay bills that are due at the end of the month.

I am thinking about cancelling my direct deposit and cashing my checks at Walmart (costs $3.00, which is pretty cheap considering) and then putting the money on a pre-paid moneycard. That way I can pay bills I owe online with the card and the CA can't re-garnish funds in my bank account after 20 days.

My question is...can they garnish a pre-paid moneycard? Would they even know it exists? They also have a reload fee which is waived if you get direct deposit but I don't know if that would set me up to have it garnished.

I am thinking about just letting them garnish for 8 months and then file chapter 7 rather than file a chapter 13 and have to refile a chapter 7.

I already took the $900 out of my savings but still have money in my checking. I guess they can take that without notifying you so back to the bank tomorrow to withdraw that too.

It will be a pain to have to get my checks cashed and get money orders for rent but it's better than me risking them taking more money than the 25% off of my check.

Does anyone have any experience with this?

I alway's wondered why so many people don't have bank accounts. Now I know......

[AngelinaCat]

HI mountanddo:

I personally have no experience with this, but I would think a Wal-Mart card would be safe. HOWEVER, and I capitalized that for a reason, if a garnishment order comes down, the creditor looking to garnish, may well go after your paycheck while it is still in the hands of the Payroll Department of your employer. Human Resources departments everywhere have to deal with child support payments and the like.

There is another recent thread here about a person who just got hired at Boeing, is in an active Ch13, with the plan being confirmed, but payments haven't yet started. The Chapter 13 trustees like the Payroll deduction method, and this person was concerned about how it would 'look' to the new employer.

So that is another thought for you to ponder. Meanwhile, wait and see if Despritfreya comes on board. Des is an attorney and will be better able to advise.

Good luck to you!

[mountanddo]

HI mountanddo:

I personally have no experience with this, but I would think a Wal-Mart card would be safe. HOWEVER, and I capitalized that for a reason, if a garnishment order comes down, the creditor looking to garnish, may well go after your paycheck while it is still in the hands of the Payroll Department of your employer. Human Resources departments everywhere have to deal with child support payments and the like.

There is another recent thread here about a person who just got hired at Boeing, is in an active Ch13, with the plan being confirmed, but payments haven't yet started. The Chapter 13 trustees like the Payroll deduction method, and this person was concerned about how it would 'look' to the new employer.

So that is another thought for you to ponder. Meanwhile, wait and see if Despritfreya comes on board. Des is an attorney and will be better able to advise.

Good luck to you!

Thank you AngelinaCat! I realize that they are going to garnish my paycheck the 25% and am prepared for that. It's just that I read that they can garnish an additional amount of any money that is in your bank account once it gets older than 20 days. I can eat ramon for the next 8 months if they take 25% of my paycheck but if they then go after what is left in my account then I won't be able to pay my rent and will end up out on the street. Just trying to protect what will be left. Since I get paid weekly, it's likely that there will be money sitting out there longer than 20 days. It sucks that that can happen after they've already taken the 25% but I'm not taking any chances. Thought the pre-paid card would be a good option as I pay all my bills but my rent online and would really like to not have to carry or keep cash in my apartment for the taking. I'm thinking maybe the direct deposit would not be a good idea as they might be able to trace that to my employer but I'm not sure.

The good thing right now is that even though my employer can't discriminate against me due to a garnishment (I'm actually in HR) I am currently working for a temp agency so my employer won't even know about it until they decide to hire me which I hope is very soon!

[AngelinaCat]

With what you have added here, I think that probably the Wal-Mart gift card may be a good idea. Again, I have no experience with that, and Des might be the best person to advise.

However, if a creditor is *mean* enough, and there are some of them out there, they may go to the extent of trying to trace down your assets including your bank account and find out what the history of it was for the past six-12 months.

Again, I am talking out of the side of my head, and I know not of what I speak. I think of things and put them out as a possible scenario to ask of your attorney, if you have one.

[ttg1]

mountanddo

Wage garnishments and bank garnishments are two different beasts. Wage garnishment is between the creditor and your employer. You will never see the wages that are garnished as the go directly from the employer to the creditor.

Bank garnishments are between your creditor and your bank. Unlike a wage garnishment a bank garnishment is normally a one time deal, although in theory they can keep coming back which is why it's advisable to close your accounts. Moreover, a bank garnishment can only happen if the creditor can find your bank account. This is not as simple as you expect, especially in todays world on Internet banking. Some people go so far as to open a foreign bank account where the court order has no effect.

A Wal-Mart money card will do nothing to protect you from a wage garnishment. In will protect you from a bank garnishment only to the extent that the creditor never finds out about it.

BTW, if you go this route the Western Union pre-paid debit card has a lot less fees than the Wal-Mart card.

[DesdemonaB]

Hi
Sorry to hear about the garnishment, it sucks I know. It seems your biggest concern is can a pre-paid debit card be garnished; this is from the Wal-Mart website…

Sharing Information About You.
We will disclose information to third parties about your Wal-Mart MoneyCard or the transactions and loads you make:
Where it is necessary for completing transactions or loads;
In order to verify the existence and condition of your Wal-Mart MoneyCard for a third party, such as a credit bureau or merchant;
In order to comply with government agency or court orders;
If you give us express permission;
and As otherwise provided in our Privacy Policy

My pre-paid UpSide card has pretty much the same policy. So if a pre-paid card receives a Writ of Garnishment they must answer.

But to garnish an account the creditor needs to know about the account, once they confirm the account they must request and receive from the court a writ of garnishment before an account can be touched.

IMHO I would still invest in an on-line debt card like UpSide vs. cash a check and loading a Wal-Mart card or MoneyPak. Too many fees and with the garnishment at 25% of your weekly check the last thing you want to do is throw away money.

Example: cash your paycheck 3.00x4 weeks = 12.00. Loading Wal-Mart card (non-direct deposit) 3.00 x 4 weeks = 12.00 + 3.00 monthly maintenance fee = 27.00 per month for 8 months is about 216.00 just in fees. And if you load from the store (non-direct deposit) you have to pay 3.00 just to insure the card, so add 12.00 more a month that would push your fee over 300.00 for 8 months. This would be all non-direct deposit, you walking in with a paycheck and transfer the cash to a Wal-Mart Card.

You’re in HR you would know if your employer can disclose your direct deposit or not, if the creditor doesn’t know about it I think you might be good for the next 8 months or till you file.

Research and compare fees with the garnishment the last thing you can afford to lose is more money.

Good luck with everything.

[frogger]

Walmart card = GE Money Bank = 90% of the store brand credit cards.

[karm43]

These cards are probaly owned by someone you owe. Are you in a garnishment state? I go through this thought everyday, I could relate. However my employer only does direct, but I am not in a state where they could take your pay [only if you owe taxes] but they could take my bank account. What about money orders? I know inconvenient if you pay everything on line, especially if you pay right on day they are due, but its a thought. I so far have made arrangements with judgements at least I know what their getting, but I have no money at the end

[karm43]

Sometimes if you offer them a little money they may go for it, It might be less money for you to dish out.

[IamOld]

If you open a bank account in a STATE Chartered (small) bank in Delaware, they do not have bank acct levies in DE as long as the bank is state chartered!!!!

[ttg1]

If you open a bank account in a STATE Chartered (small) bank in Delaware, they do not have bank acct levies in DE as long as the bank is state chartered!!!!

I never knew that. Thanks for sharing. Although, tbh, it's one of those factoid I hope to never have to put to use.

[IamOld]

I never knew that. Thanks for sharing. Although, tbh, it's one of those factoid I hope to never have to put to use.

Agreed - me either - but I've got the info on it saved....

[jacko]

Walmart offers free direct deposit for payroll checks. They will waive the $3 monthly fee if you deposit a total of $1000 per calendar month. There is no longer a bill pay fee as well. I love my debit account with them. No more holding on to direct deposit shenanigans that Wells Fargo has employed. When you print out the Walmart direct deposit form, it lists a checking account type number and routing number. I use that info to link my brokerage IRA account when I deposit funds. As longs as you tell no one, your money will be safe. But spread your money around with other debit accounts like the new Amex one.

[GoingDown]

This question has been asked many times.

I have not yet heard of anyone getting a pre-paid debit card garnished.

I have a small judgment against me, and I have a pre-paid debit card, and it has never been garnished.

With that being said, I think it is always best to follow this rule of thumb... never put more money in any account (whether it is a regular checking account or a pre-paid debit card) than you can afford to lose, once you get a lawsuit filed against you. Keep cash and use money orders whenever possible.

I only keep a small amount of money in my pre-paid debit card and then whenever I want to buy something online that requires a visa number, or if I need to pay a bill online with a visa number, then I go add funds to the pre-paid debit card-- a few dollars more than I will need for the transaction(s) and then immediately use it up online.

Here are some links to previous discussions about this matter...

http://www.bkforum.com/showthread.php?65636-Walmart-Money-Card-Issuing-Bank-is-also-one-of-my-creditors

http://www.bkforum.com/showthread.php?68077-Can-the-Creditors-found-my-Debt-money-card-like-green-dot.Rush-cards

Here is a very informative quote about this issue...

It's an interesting question...but the issue is more of a technology question than a legal question.

And there are 2 issues.
1. Do collectors have the right to those funds (that is simply an issue of state exemption law, so, unless you have a wild card or cash exemption, collectors have the "right" to get your pre paid card, the card, in essence is no different than having cash on hand).
2. Could a collector actually garnish it (legally yes, since they have the right to those funds, they could garnish). But from a practical perspective, it is very difficult to do.

Is it legally possible, yes; is there a real risk of it happening...very very low risk. Honestly, I have never heard of it happening. (to difficult for creditors to find it, and even then, there may not be a mechanism to do it because there may be no registered agent in your state for the company upon which to serve a garnishment order).

It depends on the nature of the card. If its more like a gift card, then there is no underlying account. The card simply replaces cash. When you give $100 to green dot, they give you a card (minus the fee) that has a value of $95 that you can use. But, it is theoretically possible since most companies will require social security numbers to get a pre paid card. (they do this now to thwart money laundering).

Also, be careful, deliberately hiding money when there is an active judgment is fraud and you can be held in contempt of court and actually be put in jail.

But, at a post judgment debtors exam, they could ask you for it and I know some firms have there attorneys carry a cell phone app to read and process cards.
Honestly, I am not sure anyone knows the answer, when you google search the issue, all the information is general in nature and very hedged. At the end of the day, can they, yes, will they, most likely not.

As for the debtor's exam issue mentioned in the post, let me just say that these very rarely ever happen. And if they did happen, you will get plenty of advanced warning before you had to attend one. At that point, I would make sure that the debit card had nothing left in it, long before I had to attend the exam. In the unlikely event that they asked about it, my memory might fail me. I certainly would not bring the card or any cash, etc. with me to the exam. And since my money would all be in the form of cash, safely hidden away at home, by the time the exam rolled around, who's to say I wouldn't forget about it as well? Something like that, they simply don't have the time, manpower, resources, nor the inclination to do all the work necessary to prove otherwise. They mainly know what you voluntarily tell them.


And one last thing I would like say about this... if I am going to make a purchase at something like Amazon, I just go to the local grocery store and buy an Amazon gift card with cash. I then put the gift card number on my account, and use it to make purchases rather than using a debit card. The gift card never expires, and the money is quite safe from creditors.

[ttg1]

As for the debtor's exam issue mentioned in the post, let me just say that these very rarely ever happen. And if they did happen, you will get plenty of advanced warning before you had to attend one. At that point, I would make sure that the debit card had nothing left in it, long before I had to attend the exam. In the unlikely event that they asked about it, my memory might fail me. I certainly would not bring the card or any cash, etc. with me to the exam. And since my money would all be in the form of cash, safely hidden away at home, by the time the exam rolled around, who's to say I wouldn't forget about it as well? Something like that, they simply don't have the time, manpower, resources, nor the inclination to do all the work necessary to prove otherwise. They mainly know what you voluntarily tell them.

Well said. I'd also add that my state doesn't have a debtors exam in the modern sense. What happens is that the sheriff comes to your door and asks you if you have any assets over legal exemptions. If you don't, then you have to sign a piece of paper saying so which the sheriff files with the court. If you do have assets, the sheriff then takes a visual inventory of the property you own, writes it down, and files that with the court. The actual judgment creditor is never involved in the process. It is simply impossible for the judgment creditor to find out through the legal system what financial assets you have. Frankly, the law in my state is still from the 1800s in many ways. This is one way that benefits the debtor.