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Ask C.Fortunato Your Own Question

C.Fortunato
C.Fortunato, Attorney
Category: Legal
Satisfied Customers: 8023
Experience:  Admitted NYS Bar, member ABA, NYSBA, NYCBA, QCBA, Licensed Real Estate Broker
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Hi I had a restraint placed on my bank account by a LR CREDIT

Customer Question

Hi I had a restraint placed on my bank account by a LR CREDIT 11, LLC (some kind of collection agency or attorney). What can I do to resolve this problem ? What is the best way to go about this ? Can I get that restraint lifted so I can have access to my account ? and how can I make sure that this does not happen again in the future ? This is seems to be from some debt that is about 10 years old, yet they are saying that judgment was entered on 4/25/2007 in favor of the plaintiff as judgment creditor and against defendant (me) as judgment debtor in the amount of $3279 of which $3279 together with interest from 4/25/2007 remains due and unpaid.
Please help me, thank you.
Submitted: 1 year ago.
Category: Legal
Expert:  C.Fortunato replied 1 year ago.

cfortunato :

Hi - my name is Chris and I'm a Consumer Protection attorney here to assist you.

cfortunato :

In order for any creditor to freeze a bank account, the creditor must first go to court to get a judgment.

Customer :

Yea I read that online.

cfortunato :

Did you know about the court proceeding from 2007 that resulted in the judgment that was used to freeze your bank account?

cfortunato :

Did you know about the court proceeding back in 2007?

Customer :

to be honest with you im not sure, because its been such a long time.

Customer :

I think I did back then

cfortunato :

You think you were served with the court papers?

Customer :

I think I was but did not pay attention simply because I did not have money to pay.

cfortunato :

Are the funds in your bank account from exempt sources - such as from social security, or from a pension, etc.?

Customer :

I was reading about the statute of limitation , does this apply in my case ? Its been like 10 years since this debt and a little more than 6 years since they got that ruling from the court.

Customer :

No but I also read that exempt money can also be money you've earned in the last 60 days. That is my case.

cfortunato :

The Statute of Limitations means a creditor has 6 years from your last payment to go to court to get a judgment. Once they get a judgment, they have 20 years to try to collect the money.

Customer :

even if its a debt that was bought from another creditor ?

cfortunato :

If you did not receive the papers, you could go to the clerk at the court that issued the judgment, and ask to file an "Order to Show Cause to Vacate a Default Judgment" - based on the fact that you never received the papers.

cfortunato :

Yes - it does not matter if the debt is bought by someone else. The company that purchases the debt has the same rights as the original creditor.

cfortunato :

Even if you are not sure you received the papers, if you file an "Order to Show Cause...", and if the creditor cannot prove you were served, the judgment will be vacated.

Customer :

ok so tell me more about this. also how do I know which court to go to since theres like a million of them in nyc

cfortunato :

Many creditors do not serve papers, and claim that they did serve them, because it is expensive to serve papers.

cfortunato :

What borough are you in?

Customer :

manhattan

cfortunato :

There is only one Civil Court in each borough.

cfortunato :

You would go to the clerk at the Civil Court in Manhattan. It is located on Centre Street.

cfortunato :

111 Centre Street.

cfortunato :

You should also be able to get the case information from your bank.

cfortunato :

When you do in to file the Order to Show Cause, you will be given a court date around one week later.

Customer :

question. how can they get the judgment against me to restraint my bank account if they did not really serve papers ?

cfortunato :

On this court date, you can ask that the restraint be removed.

cfortunato :

Because the collection agencies lie about serving papers when they do not.

Customer :

ok

Customer :

so they lie to the court or to the bank about having served papers ?

cfortunato :

The lie to the court.

Customer :

ok

cfortunato :

But they recently got into trouble with the courts for doing this, so they do not do it so much anymore. But they were doing it often in 2007.

cfortunato :

This is why the court will believe you if you tell them you did not receive the papers back in 2007.

Customer :

alright so that means that I can say that in 2007 they lie to the court and got the judgment against me , yet I did not received the papers I stand a better chance of getting the restraint removed.

cfortunato :

The collection agencies were so notorious for doing this, that it was termed "sewer service".

cfortunato :

Absolutely!

Customer :

ok , now will this be something that will take care of this problem for good or will I encounter similar situations in the future should another collection agency buys the debt and tries the same thing ?

cfortunato :

You don't have to say they lied, you just have to explain that you did not receive the court papers.

Customer :

ok

cfortunato :

Do you know about the EIPA?

Customer :

no I do not know about EIPA

Customer :

?

cfortunato :

The "Exempt Income Protection Act" was passed in 2009. Because of the EIPA, no bank account in New York with less than $1,716 can be frozen.

cfortunato :

Keeping less than $1,716 in any one bank account is the safest way to prevent this from happening again.

Customer :

ok, my account had 2,500 , then I took some money out and had 2,000 this is when the freezing happened and the bank allowed me to withdraw 1,740 but the rest I could not take it out

Customer :

ok if I go to court and tell them that I did not received the papers and I file for" order to show cause to vacate a default judgment " , will this be something that will take care of this problem for good or will I encounter similar situations in the future should another collection agency buys the debt and tries the same thing ?

cfortunato :

Once this judgment is vacated, it will then be too late for this or any other collection agency to go to court - because of the Statute of Limitations.

cfortunato :

When you go to court, the attorney from the collection agency will try to get you to sign an agreement to pay off what is owed - and will try to make a deal with you to allow you to pay around one half of what is owed.

cfortunato :

If you do not sign the agreement, the case will be dismissed, and it will be too late for them to file another case.

cfortunato :

If you sign the agreement, the Statute of Limitation will start to run all over again, and they will then be able to collect the entire amount if you do not abide by the agreement.

Customer :

do I have to let the bank know about what Im about to do ? I would not want them to give whatever little money is left in the account to these suckers

cfortunato :

Also, you should be careful when you go to court, as the collection agency attorney may lie to you to get you to sign the agreement.

Customer :

lie to me in what way ?

cfortunato :

Lie and tell you the Statute of Limitations has not already expired, and they will file another case if you do not sign the agreement.

cfortunato :

The bank must wait 30 days before releasing the money to the collection agency. It will not matter to them that you are planning on going to court - you have to actually go.

cfortunato :

The bank cannot remove the restraint until you bring them a paper from the court.

Customer :

Ok well Im free Tuesday so can I just simply walk in to the and talk to the clerk and ask to file the order to show cause ?

cfortunato :

Yes.

Customer :

ok anything else I need to know or watch out for before I let u go ?

cfortunato :

Don't go too late to court, because you will have to wait one to two hours for the Order to Show Cause to be signed. If you get there too late, you will have to come back the next day to pick up the signed papers.

Customer :

also if I do get the restraint removed, will it be ok then to have more than 1,716 in the bank or should I keep it under that amount in the future ?

Customer :

also what time do they open , what time should I be there ?

cfortunato :

You never know who or what may crawl out of the woodwork. I tell all my clients to keep less than $1,500 in any one account. $1,500 is an easier number to remember, and this way they do not have to worry about added interest, etc.

cfortunato :

The court opens at 8:30 am. If you get there before noon, you should be fine.

cfortunato :

You don't want to get there first thing (8:30 am), because it is always crowded at that time.

Customer :

one last question, if I decide to strike a deal with the collection agency, once I pay off the debt, will they ever harass me or try to pull another stunt like this on my account in the future ?

cfortunato :

If you make a deal with the collection agency, they will not be able to harass you or freeze your account again - unless you do not abide by the deal. In other words, if you do not pay what you agree to pay.

Customer :

ok

Customer :

i cannot thank you enough for the information you have given me, thanks a lot.

cfortunato :

You're welcome! I am happy I was able to help you!

cfortunato :

And please have a pleasant evening!

Customer :

Thank you have a good evening too, take care.

cfortunato :

But before you leave, please don't forget to provide a rating for my help.

cfortunato :

Thank you!

Expert:  C.Fortunato replied 1 year ago.
I think this is what you wanted to know. If not, please let me know.
Thank you!

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