Levying a Prepaid Debit Card!

[GoingDown]

Thanks for the detailed explanation..the reason I'm worried is that the new federal rule banks must follow might not apply to my exempt income type. It's not social security benefits, it's a public employee disability retirement, it's not federal benefits.

I'm not familiar with Nevada's laws, but in Arizona, your income would be exempt under the following laws...

A.R.S. §38-797.11

A.R.S. § 38-792

A.R.S. § 9-968

A.R.S. §38-897

A.R.S. § 9-931

A.R.S. § 43-1201

A.R.S. § 38-850C

and

A.R.S. § 20-881


Look up the exemptions for your state and find the law or laws which apply to your situation.

If I was in this situation, I think I would make sure my bank knew that my income was exempt. I would probably send them a letter by certified mail telling that my income was exempt, reference the state and / or federal laws which apply, and identify the checking account number which has your exempt funds. That way you can prove that you told them in writing that your account has exempt funds in it.

One thing I've learned is that talking to people does very little good. Everything has to be put in writing for it to carry any legal weight.

And if I was in this situation and someone sued me, I would send the judgment creditor and the attorney a letter by certified mail which told them that my income and my checking account are exempt under state and/or federal law, and I would cite the law(s) which apply to my exemption. I wouldn't give them any other information than that. This way you have a record of informing them in writing that your income is exempt. It will help your case if you end up having to deal with a frozen bank account later on, and hopefully it will keep them from bothering to seize your account since they now know it is exempt and they will just have to end up coughing it back up later on.

[GoingDown]

You would be surprized as my wife just has had them file for a debters exam on less then 6500 dollers, in her name only the joke is on them tho once she actually gets the notice to appear as her income is ssd and no assets that are not exempt.
i am assuming it will be my turn shortly for a debters exam as they got there default now only thing i am concerned about is paypal acct where i do a bit of selling

Yes, I am surprised. I very rarely hear about them happening here.

And for the very reason you just stated. They will go through all that trouble and expense and still end up with nothing. It is why most of them don't bother with it.

[GoingDown]

I forgot to add some info for those who do face a debtor's exam.

1. Prepare for it. If you have a checking account or savings account in your name or jointly held, and if there is any doubt about whether your money is safe in it, then withdraw the money from it and keep the cash safely hidden in your home at least until the matter is finished. Then you can honestly answer that you have zero dollars in your checking account or savings account when they ask you about it. You must be honest about anything which leaves a paper trail and can be verified after the debtor's exam, such as a checking account. If they asked me about my cash, something which they could NOT prove with a paper trail of some kind, well, I think you already know where I am going with this. And it is better left unsaid if you get my drift.

2. Read about what to do to make yourself as judgment/collection proof as possible. There are many websites with this information. Do as much as you can before the exam so there will be very little or hopefully nothing to take from you. The time to brace for impact is BEFORE the exam. In fact, the time to prepare is really before the judgment is entered.

3. Read the laws about your state's exemptions for judgments and make sure you bring a copy of them with you to read back to them during the judgment exam. Have something typed up claiming your exemptions for each item you know is exempt, and read them off so they get recorded and then hand a copy of the letter to the attorney. Keep a copy for yourself.

Exemptions for Arizona can be found here...

http://www.dianedrain.com/Bankruptcy/BankruptcyArticles/Articles/ArizonaExemptions/bkarizonaexemptions.htm

4. On the day of the exam, leave everything of value at home. Do not wear expensive clothes. Do not wear any jewelery, watches. Do not take your cell phone with you. Do not take any cash with you. Do not bring your pre-paid debit card(s) with you. Do not bring checks or checking account debit cards with you. And this is tough one... have someone else drive you to the exam and drop you off, or take the bus there. Do not bring your own car to the exam (hopefully by this point you have already made sure that your vehicle's equity is lower than the exemption amount for vehicles in your state). They have been known to have turnover orders with them on the spot, and will sometimes take anything of value from you during the exam. If the items are not with you, you still have some time to fight against them and claim your exemptions before they get their hands on them. And of course, out of sight, out of mind. If they don't see it on you, they may not even know you have it, and well, I think you probably know where I am going with this. I certainly wouldn't volunteer any information about anything they don't already know about.

5. Time is money to attorneys. They want to spend as little time on each exam as possible. If you are not too shy, and not too nervous, and if you want to make sure that they never call you for another exam, drag your feet all the way (without being obvious about it, be sly about it), asking them to repeat questions, taking a long time to answer questions, pondering the questions for a while in silence before you answer them with a look on your face like you are really thinking about the question, etc. Have a blank notebook and some pencils with you and write down everything possible they say during the exam (there's nothing wrong with taking notes, is there?), asking them to spell any words you might find difficult to spell. Become very forgetful and maybe even a bit confused, asking them to explain what they mean, saying that you don't understand the questions they are asking. You have to be careful if a judge is involved, you don't want to be held in contempt, so always be very respectful, but there's no law against being befuddled and confused or maybe even a bit of a dim bulb. But if the judge is onto you, then abandon the routine and just get the exam over with as quickly as possible. If a judge is not involved, the attorney is likely to become rather mean and nasty with you. Don't let him get to you. Never say antyhing illegal or threatening. Remember everything you say is being recorded and transcribed.

6. Anything which might have been revealed during the debtor's exam is no longer safe.

[Bell30656]

Always keep in mind that there are debt collectors that will grab money even if they know that it is exempt funds. They do this because once it is in their possession you have to work to get it back. They of course, hope that you will miss a step and they will get to keep it.

[aaj67]

I'm not familiar with Nevada's laws, but in Arizona, your income would be exempt under the following laws...

A.R.S. §38-797.11

A.R.S. § 38-792

A.R.S. § 9-968

A.R.S. §38-897

A.R.S. § 9-931

A.R.S. § 43-1201

A.R.S. § 38-850C

and

A.R.S. § 20-881


Look up the exemptions for your state and find the law or laws which apply to your situation.

If I was in this situation, I think I would make sure my bank knew that my income was exempt. I would probably send them a letter by certified mail telling that my income was exempt, reference the state and / or federal laws which apply, and identify the checking account number which has your exempt funds. That way you can prove that you told them in writing that your account has exempt funds in it.

One thing I've learned is that talking to people does very little good. Everything has to be put in writing for it to carry any legal weight.

And if I was in this situation and someone sued me, I would send the judgment creditor and the attorney a letter by certified mail which told them that my income and my checking account are exempt under state and/or federal law, and I would cite the law(s) which apply to my exemption. I wouldn't give them any other information than that. This way you have a record of informing them in writing that your income is exempt. It will help your case if you end up having to deal with a frozen bank account later on, and hopefully it will keep them from bothering to seize your account since they now know it is exempt and they will just have to end up coughing it back up later on.

It is indeed exempt in Nevada, but I was referring to the new federal rule the banks have to abide by, I don't think it applies to my exempt income. I do have a letter from the retirement dept. stating that my retirement is exempt, however, I'm not sure if the bank will go by just a letter. I didn't talk to the legal department there, but I spoke to the manager of my branch, she stated that they cannot just go by a letter and ignore a court order. In other words, according to her, they will most likely freeze the account until their legal department decides.

[aaj67]

I forgot to add some info for those who do face a debtor's exam.

1. Prepare for it. If you have a checking account or savings account in your name or jointly held, and if there is any doubt about whether your money is safe in it, then withdraw the money from it and keep the cash safely hidden in your home at least until the matter is finished. Then you can honestly answer that you have zero dollars in your checking account or savings account when they ask you about it. You must be honest about anything which leaves a paper trail and can be verified after the debtor's exam, such as a checking account. If they asked me about my cash, something which they could NOT prove with a paper trail of some kind, well, I think you already know where I am going with this. And it is better left unsaid if you get my drift.

2. Read about what to do to make yourself as judgment/collection proof as possible. There are many websites with this information. Do as much as you can before the exam so there will be very little or hopefully nothing to take from you. The time to brace for impact is BEFORE the exam. In fact, the time to prepare is really before the judgment is entered.

3. Read the laws about your state's exemptions for judgments and make sure you bring a copy of them with you to read back to them during the judgment exam. Have something typed up claiming your exemptions for each item you know is exempt, and read them off so they get recorded and then hand a copy of the letter to the attorney. Keep a copy for yourself.

Exemptions for Arizona can be found here...

http://www.dianedrain.com/Bankruptcy/BankruptcyArticles/Articles/ArizonaExemptions/bkarizonaexemptions.htm

4. On the day of the exam, leave everything of value at home. Do not wear expensive clothes. Do not wear any jewelery, watches. Do not take your cell phone with you. Do not take any cash with you. Do not bring your pre-paid debit card(s) with you. Do not bring checks or checking account debit cards with you. And this is tough one... have someone else drive you to the exam and drop you off, or take the bus there. Do not bring your own car to the exam (hopefully by this point you have already made sure that your vehicle's equity is lower than the exemption amount for vehicles in your state). They have been known to have turnover orders with them on the spot, and will sometimes take anything of value from you during the exam. If the items are not with you, you still have some time to fight against them and claim your exemptions before they get their hands on them. And of course, out of sight, out of mind. If they don't see it on you, they may not even know you have it, and well, I think you probably know where I am going with this. I certainly wouldn't volunteer any information about anything they don't already know about.

5. Time is money to attorneys. They want to spend as little time on each exam as possible. If you are not too shy, and not too nervous, and if you want to make sure that they never call you for another exam, drag your feet all the way (without being obvious about it, be sly about it), asking them to repeat questions, taking a long time to answer questions, pondering the questions for a while in silence before you answer them with a look on your face like you are really thinking about the question, etc. Have a blank notebook and some pencils with you and write down everything possible they say during the exam (there's nothing wrong with taking notes, is there?), asking them to spell any words you might find difficult to spell. Become very forgetful and maybe even a bit confused, asking them to explain what they mean, saying that you don't understand the questions they are asking. You have to be careful if a judge is involved, you don't want to be held in contempt, so always be very respectful, but there's no law against being befuddled and confused or maybe even a bit of a dim bulb. But if the judge is onto you, then abandon the routine and just get the exam over with as quickly as possible. If a judge is not involved, the attorney is likely to become rather mean and nasty with you. Don't let him get to you. Never say antyhing illegal or threatening. Remember everything you say is being recorded and transcribed.

6. Anything which might have been revealed during the debtor's exam is no longer safe.

Wow, you are a great help! Let me say that I have nothing of value that exceeds the exemption amount in my state. So there is nothing they can take. For example, my car is paid for but it is 10 years old with a blue book value of $4000, this is way less that the car exemption in my state.

[aaj67]

Always keep in mind that there are debt collectors that will grab money even if they know that it is exempt funds. They do this because once it is in their possession you have to work to get it back. They of course, hope that you will miss a step and they will get to keep it.

I agree, even if I send them a letter that my income is exempt, they are not under legal obligation to stop their collection efforts. Only if it has been verified thru court proceedings that my income is indeed exempt. Then and only then they are obligated not to garnish my bank account.

[aaj67]

The odds of them calling for a deposition or a debtor's exam over such a small amount of money are extremely low. So low that I personally would not worry about it.

As you know the amount in my case is around $6,500. Well, I just found a case for $2000. Believe it or not, the lady that was sued filed an answer, then the attorney for the plaintiff (Capital one) filed a motion for summary judgment, the lady filed an opposition to the motion, a hearing was scheduled, the attorney attended it. Then the attorney filed a motion for summary judgment, the lady filed an opposition to the motion AGAIN!!!!! The attorney attended a hearing AGAIN. Finally the attorney obtained a judgment. But she went thru a lot of trouble and time consuming legal procedures to get a judgment for $2000... WOW!

This attorney handles most cases for Capital One and Citibank among others..so she is very very busy! At this point, she has hundreds and hundreds of cases..