my bank accounts both personal and business corporation were garnished. My personal account were funds that I received for military disability, I do not work and this is my only income. Can this creditor do this and is it legal for them to take my income out of my checking account with out informing me. Also, how is it that our small business that is a separate entity (an S corp) can also have the funds taken? What can I do to recover my funds..... they took about $1500.00 from each account.
Country relating to Question: United States
State (if USA): Washington
Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarification.
What type of creditor was this?
Were the funds actually given out to the creditors?
Did you ever comingle funds?
The creditor is a collection agency for an unsecured debt
The Bank of America held the funds yesterday and I checked on line today and it says LEGAL STS and the funds are gone out of my account. I contacted the band and they said that is was a legal court order granishment.
What do you mean by comingle?
Did you deposit other income into the personal accounts besides your disability?
Was the s corp account under your social security or it's own tax id number?
Were you given an exemption form by the bank or creditor to complete?
Would you consider filing a bankruptcy?
yes in the past but not this time. The money that was in there was just depostied on the first of the month and I had already sent out a tax payment for our house which is now returned by the bank
The S corp is under a Federal Tax ID
Yes I feel I have no choice in this matter to file for abnkruptcy protection.
The lawsuit was against you personally?
You need to obtain an attorney now, and have them contact the creditor, or you can contact the collections company and advise them they have taken exempted money from your personal account, and that you have statements to show the account holds only disability payments
Myself and my wife are on the court docs, but now our business which is a totally separate name
The S Corp. issue is complicated, and they have no right to take that money, unless they obtain a Court order that allows them.
how about my business?
In fact, I would advise the collections company that you will be filing a federal complaint for unfair debt collections against them for this, with the FTC.
If you file a bankruptcy the accounts would be open, and the trustee could force them to send you the garnished funds back.
Do you suggest I contact my self first thing this morning and ask them to return the funds, the bank said I should dod that and work out a payment plan< what incentive do they have?
Well if this is the case how did they get a court order to sieze my money? Why did the court not evalute wherter they had a legal right do do so
You should contact them, and tell them you will be filing a complaint with the FTC, under the Federal Debt Collections Act,
Sorry I hit the wrong button?
Are you still there?
10 years experience
I do not know how your bank allowed them to garnish your account, you need to go to the bank and advise them you will hold the bank accountable for this. The Corp is a separate entity.
Do not settle any debt with the collections company, unless you have no choice, when you do contact them, they will try to settle with you, but advise them that you will file a bankruptcy now if they do not release all the funds and you will file a FTC complaint.
If you're behind in paying your bills, or a creditor's records mistakenly make it appear that you are, a debt collector may be contacting you.
The Federal Trade Commission (FTC), the nation's consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.
Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.
Here are some questions and answers about your rights under the Act.
The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn't cover debts you incurred to run a business.
No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they're told (orally or in writing) that you're not allowed to get calls there.
If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter - even if you don't think you owe the debt, can't repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don't want the collector to contact you again, tell the collector - in writing - to stop contacting you. Here's how to do that:
Make a copy of your letter. Send the original by certified mail, and pay for a "return receipt" so you'll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.
If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don't have an attorney, a collector may contact other people - but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.
Every collector must send you a written "validation notice" telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don't think you owe the money.
If you send the debt collector a letter stating that you don't owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.
Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:
Debt collectors also are prohibited from saying that:
Debt collectors may not:
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:
Yes. If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select. Equally important, a debt collector may not apply a payment to a debt you don't think you owe.
If you don't pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.
Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don't ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.
Many federal benefits are exempt from garnishment, including:
But federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans.
You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can't prove that you suffered actual damages. You also can be reimbursed for your attorney's fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.
If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.
Report any problems you have with a debt collector to your state Attorney General's office (http://www.naag.org/) and the Federal Trade Commission (http://www.ftc.gov/). Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General's office can help you determine your rights under your state's law.
To learn more about debt collection and other credit-related issues, visit www.ftc.gov/credit and MyMoney.gov, the U.S. government's portal to financial education.
The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
I asked if I should contact them to see if they are willing to work out a deal for a payment plan? The bank seems to think they may return the funds if I agree to a plan. I want to know how or why did the court allow this checking account garnishment if it was illegal? It the collection agency required to follow a process that is legal. I asked the bank about our corporation and why they released the funds and they just gave me lip service....I have to call the collection agency as it was a court order.What can I do, I have a business to run and this is going to put us out of business and we will loose I have to pay business creditors in order to stay in business and keep functioning.
They will want to settle with you, and you can try that option, but first advise them that they have taken exempt funds, and that is a violation of the law.
The business account, must have been either an error by your bank for allowing it, or some fraud, they cannot have garnished the corporate account without a specific court order.
I would consider filing a bankruptcy ASAP just to open the account, possibly a chapte 13, and then when it is open place the account in another bank or consider creating an LLC.
Can you please explain this question you asked me...."Were you given an exemption form by the bank or creditor to complete?"
When a creditor garnished an account, you can exempt certain protected monies.
The link above is the list of exempt Washington State property, that if taken has to be returned back.