Wal-Mart money card-a way to dodge a judgement?

[Diesel73L]

Does anyone have one of these? I read HHM's treatise on whether pre-paid debit cards can be garnished (the answer is "yes, but rarely because it's a hassle") and started researching them. It seems Wal-Mart offers one that will accept direct deposits. I am required to have direct deposit by my employer, so I was hoping that if I am faced with judgement one day, I could at least buy time by moving the money to a pre-paid debit. Just curious if others have experience with this.

[Freddy03]

I have not heard of these types of cards being garnished. What will probably happen is your wages will be garnished first.

[tobee43]

i know a few that used target?? that seemed to work well for them. i have also never heard one being garnished by hhm has seen many for situations that most of us.

just be careful!

[HHM]

It is a fairly safe tactic to use to "temporarily" protect assets until you have and end game scenario (e.g. BK) for the debt.

I am just trying to dispel the myth that these cards "can't" be garnished. They can, but it is exceedingly rare.

[SWConsultant]

definitely only a bandaid fix to allow you to get to BK or settlement - not a long term fix.

Another good way to avoid a judgement is to take your income into a business entity (such as an LLC or S corp) and then pay yourself through that entity. This makes it so you control your income and can protect it. If you are not 100% owner of that entity it is likely that your creditors could only obtain a charging order against the entity and therefore could only garnish distributions that were made but could not control the entities checkbook and could not force distributions. Many people are unable to do this with their employers but for those that can make this arrangement it usually is enough of a deterrent to stop creditors from continuing to pursue creditors.

Please do not take this as legal advice - it is not. In order to do this correctly the entity must have a real business purpose, be in compliance at state and federal levels, and must not be deemed an alter-ego. if done appropriately, it does offer an excellent level of protection for assets such as income and cash

[HHM]

definitely only a bandaid fix to allow you to get to BK or settlement - not a long term fix.

Another good way to avoid a judgement is to take your income into a business entity (such as an LLC or S corp) and then pay yourself through that entity. This makes it so you control your income and can protect it. If you are not 100% owner of that entity it is likely that your creditors could only obtain a charging order against the entity and therefore could only garnish distributions that were made but could not control the entities checkbook and could not force distributions. Many people are unable to do this with their employers but for those that can make this arrangement it usually is enough of a deterrent to stop creditors from continuing to pursue creditors.

Please do not take this as legal advice - it is not. In order to do this correctly the entity must have a real business purpose, be in compliance at state and federal levels, and must not be deemed an alter-ego. if done appropriately, it does offer an excellent level of protection for assets such as income and cash

The key to that strategy is that the income source has to pay the company directly. As pointed out, most peoples employers will simply not do this, so it is of limited benefit. What DOES NOT work is opening an LLC, and then simply depositing your check into the LLC bank account.

[SWConsultant]

The key to that strategy is that the income source has to pay the company directly. As pointed out, most peoples employers will simply not do this, so it is of limited benefit. What DOES NOT work is opening an LLC, and then simply depositing your check into the LLC bank account.

Very true. The company must be paid directly , which means the person would have to workout a 1099 relationship with their employer. Hence the reason this is not for everyone.

Also true is the fact that just opening an LLC as your are getting garnished will be seen as an attempt to defraud creditors. This can be very powerful strategy but must be implemented with some skill in order to avoid these claims. It is best, but not necessary, if the LLC or company is in place long before threats from creditors

[tobee43]

i know a few that used target?? that seemed to work well for them. i have also never heard one being garnished by hhm has seen many for situations that most of us.

just be careful!

can someone tell me when the next typing class is...

let me stand corrected if i can type it out...

hhm has seen and experienced enough situations where i would take what is written for scoop on how to handle this.

whether it's rare or not, apparently, it can happen.

[BKorbust]

definitely only a bandaid fix to allow you to get to BK or settlement - not a long term fix.

Another good way to avoid a judgement is to take your income into a business entity (such as an LLC or S corp) and then pay yourself through that entity. This makes it so you control your income and can protect it. If you are not 100% owner of that entity it is likely that your creditors could only obtain a charging order against the entity and therefore could only garnish distributions that were made but could not control the entities checkbook and could not force distributions. Many people are unable to do this with their employers but for those that can make this arrangement it usually is enough of a deterrent to stop creditors from continuing to pursue creditors.

Please do not take this as legal advice - it is not. In order to do this correctly the entity must have a real business purpose, be in compliance at state and federal levels, and must not be deemed an alter-ego. if done appropriately, it does offer an excellent level of protection for assets such as income and cash

I'm a 1099 independant contractor looking to hold out nine more months. Thanks for the idea.

[jacko]

Moneygram is another option. They allow up to $10,000 a month in direct deposits. You might want to split up your direct deposits on two prepaid cards.

Does anyone have one of these? I read HHM's treatise on whether pre-paid debit cards can be garnished (the answer is "yes, but rarely because it's a hassle") and started researching them. It seems Wal-Mart offers one that will accept direct deposits. I am required to have direct deposit by my employer, so I was hoping that if I am faced with judgement one day, I could at least buy time by moving the money to a pre-paid debit. Just curious if others have experience with this.

[SWConsultant]

You're welcome- but please be careful and consult with appropriate counsel. If done correctly, this structure will work nicely for someone in your position. If done or maintained inadequately, it will just raise suspicion amongst your creditors and could be a waste of time... Good Luck!

[SweetGeorgia]

I'm also looking into the new Suze Orman-endorsed debit card since she said it will waive monthly fees with direct deposit from any source (i.e., not just employer). Got to research a bit more, but that could be helpful.

HHM is the master, but in my experience: the key with avoiding garnishment is "do they know where to go". Our personal experience, FWIW, involved 2 wage garnishments. One was filed by our old HOA. They knew where my husband worked because he was friends with the board. They knew his employer and they used that knowledge against him but if they weren't friends they wouldn't have known. Creditor #2 filed another wage garnishment based on the information in the HOA garnishment, as well as a bank garnishment based on the checks we'd paid them with.

If your creditors do not know where you work, don't tell them. They can still find out, via post-judgment discovery and whatever investigative tactics they use, but it will take longer.

If your creditors do not know where you bank, don't tell them. This may mean changing banks, at the least. You probably checks to the creditor at some point (I chuckled to think the HOA didn't know which bank to garnish because my husband had NOT ONCE written a check to them in 9 years). Again, this is just a stalling tactic because they can still find out where you bank eventually. In my area, creditors will sometimes just serve garnishments on the 4 biggest banks with local presence. This is why I frequently advocate using an out-of-state bank, especially if you anticipate garnishments.

Good luck!

[MSbklawyer]

Here is another way to avoid a garnishment if you have a spouse and/or kids: Have your spouse establish a child support / spousal support order against you that takes at least 25% of your income via wage order. With your wages already being garnished by 25% to support your spouse and children, creditors cannot touch it.

Who's to say that with all this collection pressure weighing down on you that you won't go out and drink up your whole paycheck? If you do that, your kids might go hungry, have to go to school bare-footed and such. We, as a society, can't have that. I'd say a support order is most definitely called for.

[shark66]

Here is another way to avoid a garnishment if you have a spouse and/or kids: Have your spouse establish a child support / spousal support order against you that takes at least 25% of your income via wage order. With your wages already being garnished by 25% to support your spouse and children, creditors cannot touch it.

Who's to say that with all this collection pressure weighing down on you that you won't go out and drink up your whole paycheck? If you do that, your kids might go hungry, have to go to school bare-footed and such. We, as a society, can't have that. I'd say a support order is most definitely called for.

This is, hands-down, one of the ten most brilliant concepts I've ever come across in any walk of life. Downright ingenious. BRAVO!

Good luck to us all.

[MSbklawyer]

This is, hands-down, one of the ten most brilliant concepts I've ever come across in any walk of life. Downright ingenious. BRAVO!

Good luck to us all.

Thank you. If, however, the thought of supporting your family to the exclusion of BofA getting paid causes you to lose sleep, you can always agree with your spouse to have your support order set at 24% of your income. This way, BofA will be able to garnish 1% of your wages. Of course, the paperwork/legal fees/court costs to do this will cost them more than the 1% that they'll be getting. But they'll do it anyway even though it will result in a net loss for them. That should make you sleep better.