Collectors Wipe Out Bank Accounts: If you’re behind on credit card payments, you may be worried about debt collectors coming after you. And if you have ever wondered what would happen if a collector decided to take money straight from your bank account, you’re not alone.
Unfortunately, the answer is yes; in some instances, they can.
In this article, we will explore can collectors wipe out bank accounts and how much money they are allowed to take. We’ll also provide some tips on how to protect your money from garnishment.
Why Can A Debt Collector Access Your Account?
If you have credit card debt, medical debt, or any other type of unsecured debt, a creditor can potentially take money from your bank account to satisfy the debt. This is called “garnishment.”
Garnishment happens when a creditor gets a court order requiring your bank to turn over funds from your account to pay off your debt. The court order will specify the amount of money that can be taken from your account.
In order for a creditor to garnish your account, they must first send you a notice that they are going to take legal action against you if you don’t pay what you owe. This is typically called a “notice of intent to sue.” If you still don’t pay after receiving this notice, the creditor can file a lawsuit against you.
If the creditor wins the lawsuit, they will receive a judgment from the court. This judgment will state how much money you owe, plus interest and any fees associated with the lawsuit. Once the creditor has a judgment, they can then request that your bank account be garnished.
What Do They Need to Access Your Account?
In order for a creditor to garnish your bank account, they must have your bank account number and the name of your bank. Once they have this information, they can send a notice to your bank informing them of the debt and requesting that funds be taken from your account to satisfy the debt.
Creditors can’t just wipe out bank accounts, they must follow the proper process first, and this will involve keeping you informed of their intentions.
How Much Money Can They Take?
It depends on the state you live in. Delaware, for example, does not allow the garnishment of bank accounts. Most other states have placed a limit on how much a debt collector can take through garnishment. In New York, a consumer’s bank account is protected to the tune of $2,664 – $3,600. If your balance is below that figure, they won’t be allowed to take anything.
How to Protect Your Money From Garnishment
If you are worried about a creditor attempting to garnish your bank account, there are some steps you can take to protect your money.
First, you can try to negotiate with the creditor. If you are able to come to an agreement on a payment plan or a settlement, you may be able to avoid garnishment altogether.
You can also make a “claim of exemption.” This is a formal request to the court that your money should not be garnished because it is needed for basic living expenses. If the court agrees, your funds will be protected.
Finally, you can open up a new bank account in an account that is not subject to garnishment laws. For example, many credit unions are exempt from garnishment orders.
If you find yourself in a situation wondering can collectors wipe out bank accounts it’s important to remember that you have rights and there are ways to protect your money. With the right information and some help from an experienced attorney, you can fight back against aggressive creditors and keep your hard-earned cash.