Posted on June 2, 2009 at 12:02 pm I read about garnishment, but what about money in a checking or savings account?

Posted on June 2, 2009 at 12:14 pm Mr. Kimble, It is possible that a creditor or debt collector may "freeze" the debtor's bank account and take available money from that account to pay off the debt amount. However, in order to do this, they must first sue the debtor. If the case is awarded to the creditor, a judgment will be entered against that person. If after that point no resolution is reached, the creditor or its collector will get an order of garnishment that notifies a third party, such as a bank, to direct the money from the bank account back to them to satisfy the debt. I would say that this is rare since most creditors will try to garnish the debtor's wages first, unless the debtor resides in a state that does not permit wage garnishment for credit card debt by law.

Posted on June 2, 2009 at 3:03 pm If you want to avoid this situation you may want to consider contacting the collector (I am assuming it is an attorney?) and trying to resolve the debt once and for all. Since it appears that your accounts are past due, you may want to call the collector and offer a settlement for a reduction of what is owed. Typically, one can save around 50% of the total balance if the collector agrees to a settlement on a past due account, sometimes more. If it is a law firm, the settlement percentages may in fact be higher (and savings less), but you can avoid the headaches of a bank account levy by coming to a resolution. If you are not comfortable negotiating on your own, or you are not familiar at all with the internal policies of the collector, you may want to find a reputable settlement company to work on your behlaf. Such a company may have worked with your collector in the past and know what percentages they are likely to accept for a settlement, thus potentially saving you more money in the long run. Fill out a form on DestroyDebt.Com to get matched up with a qualified provider if you are having trouble finding a good company.

Posted on June 2, 2009 at 5:22 pm Would you mind listing the states that do not allow wage garnishing, Lions Den? 

Posted on June 3, 2009 at 3:17 am States that don't allow wage garnishment are PA, SC, NC, and TX. The same applies to FL, but only if the debtor is the head of the household.There's also a special law in KS called a "purchased paper" law--like if the account has been transferred or sold to a debt collection company prior to judgment, the debtor's wages cannot be garnished. If it has been sold after the judgment, on the other hand, his or her wages can be garnished.Hope this helps you, Lucid Debt.