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cfortunato, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 8023
Experience:  Areas of practice: Landlord/Tenant, Bankruptcy, Consumer Debt
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I live in Montana. A collection agency levied all my bank accounts,

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I live in Montana. A collection agency levied all my bank accounts, except for my LLC. Statute of limitations was about to run out on this debt. They want me to make payment arrangements, but, from what I understand, this will reset the debt and reflect badly on my credit report. With statute of limitations about to run out, what should I do? Make the payment arrangements or pull my money from my bank accounts until the statute runs out?

cfortunato : Hi - my name is XXXXX XXXXX I'm a Consumer Protection attorney here to assist you.
cfortunato : In general, a creditor must first go to court to get a judgment before attaching any bank accounts.
cfortunato : Did you you know about the court proceeding that resulted in the judgment the collection agency used to attach your bank accounts?
Customer: The papers were served to one of my kids at my house. I saw it and since there wasn't an actual judge's signature and just a stamp, I assumed it was a scare tactic. Statute is about to run out. I don't want to reset this thing by making payment arrangements and end up with a negative credit report for the next 5-7 years.
cfortunato : Are you asking about the Statute of Limitations for going to court to get a judgment, or the Statute of Limitations for the amount of time a creditor has to collect a judgment once the judgment is issued?
Customer: Statute of limitations for the amount of time a creditor has to collect a debt, period....actually, I am pretty sure in Montana it's 5 years. What my question is, is that I'm about 4 and half years delinquent. With having only 6 months to go before this debt rolls off of my credit report, am I going to reset the whole thing by making an agreement with this collector?
cfortunato : If the creditor already got a judgment, making a payment arrangement will not re-set anything.
cfortunato : Re-setting is in reference to the amount of time a creditor can go to court to get a judgment.
cfortunato : Once a judgment has been gotten, the Statute of Limitations no longer applies for getting a judgment.
cfortunato : But the creditor then has 10 years to collect the judgment.
Customer: Ok, so agree to their terms then because what I'm understanding from you is that it's going to reflect on my report for the next several years anyways. It has to be paid off in order to get it removed, eventually. I had this happen many years ago with a company that I stopped paying because they were bought out by another company and the new company raised the rates. I just stopped paying, but they never filed a judgement. 7 years later, it wasn't even on my credit report any more.
cfortunato : However, before you agree to their terms, you may want to try to have their judgment vacated - based on the fact that the court papers were not properly served.
Customer: I wouldn't know the first thing about doing that.
cfortunato : It is very easy. Did you get the court information from your bank(s)?
Customer: No, I didn't
cfortunato : Your banks have the court information - that is the only way they can allow your accounts to be attached.
cfortunato : Get the court information from one of your banks.
cfortunato : Then go to the clerk at the court that issued the judgment, and ask to file a Motion to Vacate a Default Judgment -
cfortunato : based on the fact that the court papers were not properly served.
cfortunato : The clerk will provide the necessary forms for you, and some clerks will fill out the forms also.
cfortunato : The court papers were supposed to be given to you personally, not to your son.
Customer: Ok, I will do that before making any arrangements. The collector didn't touch my LLC business account. Is that because it's not legal for them to do that in the state of MT?
cfortunato : They cannot directly attach your LLC account unless the judgment is against the LLC also.
Customer: OK. You have been very helpful. I don't want this free trial thing. Am I going to get charged every month now for signing up to get this one question answered?
cfortunato : If you do not want the monthly plan, it can be cancelled right away. But you have to contact customer service [email protected] to tell them you do not want the monthly plan. I will send them a message for you also.
Customer: Thank you very much! Have a wonderful day! Is there a reference number I need to include in the email?
cfortunato : Just give them your account ID, which is JACUSTOMER-eqh0a384.
cfortunato : And you are very welcome!
cfortunato : And you have a pleasant rest of the day also!
cfortunato : But before you leave, please don't forget to provide a positive rating for my help.
cfortunato : Thank you!
cfortunato, Lawyer
Satisfied Customers: 8023
Experience: Areas of practice: Landlord/Tenant, Bankruptcy, Consumer Debt
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A judgment, either domestic or foreign, is enforceable in the State of Montana for a period of ten (10) years. ( MCA 27-2-201.) A writ of execution on the judgment may be issued within six (6) years of entry of the judgment (MCA 25-13-101), and may be revived after expiration upon filing a motion with the court (MCA 25-13-102).

A judgment may become a lien upon all real property of the judgment debtor that is not exempt from execution in the county where the property is located for a period of 6 years upon the docketing of a judgment or upon the filing of a transcript of the judgment. (MCA 25-9-301, 25-9-302.) All goods, chattels, moneys, and other property, both real and personal, not exempt by law, of a judgment debtor are subject attachment and execution. (MCA 25-13-501.) The wages of a judgment debtor may also be garnished but the maximum amount which may be garnished may not exceed the lesser of 25% of his disposable earnings for a workweek, or the amount by which his disposable earnings for the week exceed 30 times the federal minimum hourly wage in effect at the time the earnings are payable. (MCA 25-13-614.)

The debtor does have exemptions - property which a judgment creditor can’t touch.

In general, a debtor may claim exemption of his homestead and certain personal property from attachment and execution of a judgment, or in a bankruptcy proceeding.

A judgment debtor is entitled to a homestead exemption of his dwelling house or mobile home, and all appurtenances thereon, from execution or forced sale. (MCA 70-32-101, 70-32-201.) If the debtor is married, the homestead may be selected from the property of either spouse. (MCA 70-32-103.) The value of a homestead may not exceed $60,000. (MCA 70-32-104(1).) If a debtor who is an owner of an undivided interest in real property claims a homestead exemption, he is limited to an exemption amount proportional to his undivided interest only. (MCA 70-32-104(2).)

A debtor, who is a resident of the State of Montana is also entitled to claim exemption of certain personal property from execution or forced sale. (MCA 25-13-606.) Some of the personal property which may be exempt from execution, without limitation, are professionally prescribed health aids for the debtor or his dependent, federal social security or local public assistance, veterans' benefits, disability or illness benefits, benefits paid or payable for medical, surgical, or hospital care to the extent they are used or will be used to pay for the care, maintenance and child support, a burial plot, and social security legislation benefits. (MCA 25-13-608.) Personal property which are exempt up to a limited value may include household furnishings and goods, appliances, jewelry, wearing apparel, books, firearms and other sporting goods, animals, feed, crops, and musical instruments to the extent of a value not exceeding $600.00 in any item or $4,500.00 in aggregate value, one motor vehicle not to exceed $1,200 in value, implements, professional books and tools of the trade not to exceed $3,000.00 in aggregate value, and any unmatured life insurance contracts not to exceed $4,000.00 in value. (MCA 25-13-609.)

In situations where money or property has been sold, lost, damaged or destroyed, and the judgment debtor has been indemnified, he is entitled for six (6) months to an exemption of proceeds that are traceable. Earnings of the judgment debtor may also remain exempt for 45 days after receipt by him and while in his possession in a form that is traceable. For the purpose of tracing, the principles of first-in first-out, last-in first-out, or any other reasonable basis for tracing selected by the judgment debtor may be applied. (MCA 25-13-610.)

In a bankruptcy proceeding, a debtor may not claim exemption of the property specified in 11 U.S.C. 522(d) except for those property which may be exempt from execution of judgment under the laws of Montana, unemployment benefits and certain retirement plan benefits. (MCA 31-2-106.)

A statute of limitations is a law which places a time limit on pursuing a legal remedy in relation to wrongful conduct. After the expiration of the statutory period, unless a legal exception applies, the injured person loses the right to file a lawsuit seeking money damages or other relief.

The statute of limitations on breach of contracts is: Written, 8 years; Oral, 5 years.

A statute of limitations can be "revived", "waived", or "extended".

If a debt collector or original creditor contacts you about an old, time-barred debt, be very careful in what you say to the person. If you say or sign anything that might be considered an acknowledgement of the validity of the debt (meaning, you agree that you owe that debt even if the statute of limitations to sue has expired), then you may have revived, waived, or extended the statute of limitations. Or, if you make an agreement with that person to pay the old debt, then you also may revive, waive or extend the statute of limitations.

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