Debt Collection – Auto Loan Deficiency – Bank Account Levy – Wage Garnishment

I am from Pennsylvania.. I co-signed a car loan for my son 6-7 years ago, (I cant remember exactly how long ago.) My son was 16 at the time, he lost his job about a year and a half after he got the car, and I couldnt afford the payments, so we gave the car back. A judgement was placed against my son and I by default in August, filed through the Sheriffs office at the courthouse and on December 5th they put a hold on my bank account for 8,000.00. I found out about the hold by trying to use my debit card, and received the paperwork concerning the hold approx. a week later. Iimmediately stopped direct deposit of my paycheck and opened a joint account with my boyfriend to protect my money from that point on. I called the attorney/debt collector after finding out about this hold and I was told that they sent a Letter of Interrogatories would be sent to my bank (PNC BANK) and that they had 30 days to respond to this letter. Until then they were holding my account. Needless to say I was in a great financial bind, I had 300 dollars in that account that i desperately needed. Per the letter from the Sherriff office, the state of PA gives a cash exemption of 300 dollars, which what is in this account. A couple of days ago I got a certified letter from PNC Bank providing an answer to the interrogatories that was sent to me, the Sheriffs office and the attorney/debt collector. This was sent on 12/24, and it is now 12/31 and my acount is still frozen. They have never done anything to my son ( who is now 23).

How much longer will my bank account be frozen, and can they attach my wages for this debt owed?

—Keri C

It would be good to know a bit more about the nature of the deficiency judgment and the debt in order to give more than general feedback. I will pose some questions below that you can answer in a comment reply that will help me understand the collection situation better.


Wage garnishment in Pennsylvania.

Your wages cannot be attached or garnished for this type of debt in Pennsylvania. PA is one of the more favorable states protecting your income from employment in this regard. That leaves property liens and bank account levies (which you are experiencing) as options for collection action on a judgment.


Do you own real estate in Pennsylvania?


Debt collectors often use skip tracing methods to locate bank accounts in your name. That may be how they found your bank account they are levying now. Unfortunately, they can use the same tactics to locate the account you opened with your boyfriend. That account is not protected just because it is a joint account. In fact, your boyfriend’s money could be at risk.


Your account with the current levy could be at risk until the debt is resolved.


Collecting on auto loan deficiency balances.

When you surrender a vehicle that you still owe money on, they auction it off. Whatever they get at auction is deducted from what is still owed on the car loan. What’s left unpaid is the deficiency balance. These deficiency balances often get sold off to debt buyers. Debt buyers will send these debts to a collection attorney. Sometimes, as is the case with you, the attorney will sue in order to collect. This type of lawsuit can end up with a judgment debt against you.


Settling a deficiency balance from an auto loan after voluntary surrender or repossession.

You can settle a debt that is the result of a surrendered or repossessed vehicle at any stage I referenced above. There are variables for settling debt like this that are unique to you and also the stage of collection. The collection stages are:

  • Settle the deficiency amount while it is owed to original lender
  • Settle with a collection agency that the original lender sent the deficiency balance to for collection
  • Settle with a debt buyer after the deficiency balance is purchased
  • Settle with a collection agency the debt buyer assigns the deficiency debt to for collection
  • Settle with an attorney that the lender or debt buyer hires to collect on the deficiency

The amount you can save when settling a deficiency balance will vary. When there is a judgment in place after being sued on this type of debt (or most types of judgment debt), the settlement savings will generally not be as good as would have been the case when settling prior to collections filed in court.


You are better off living in Pennsylvania because your wages are protected from garnishment. Once the debt collection efforts from levying a bank account prove unfruitful, you are generally going to be in a better position to get a better deal through settlement.

Is your goal to settle the deficiency balance that is now a judgment?

The judgment is not going anywhere. In fact, the balance is likely growing with judgment interest set by the court. You can read a bit more about the long shelf life of judgment debt here:


There may not be good options for you to settle the deficiency judgment right away. In that case you can try to manage your affairs on as much as a cash basis as you need to until you have a plan to resolve the debt.


You mentioned being a cosigner on the loan originally and that your son not hearing anything on this. That would make sense if he was 16 at the time. He would not be able to contract for the loan at 16.


Can you tell me if the loan was ever refinanced after your son turned 18?

Who was the original lender?

When was the last payment on the car made?

Who sued – the original lender, or a debt buyer? If a debt buyer, what name?

Who is the attorney hired to collect?


If you can answer my questions in a comment reply below I will have more feedback.

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  1. Hello, to answer your questions- no, the loan was never refinanced after my son turned 18 years old. The lender of the vehicle was Ford Motor Credit. The last payment made on the car was about 5 years ago. The original lender, Ford Motor Credit is who sued. The attorney firm who was hired by Ford Motor Credit is Sklar -Markind, Attorneys, and they are located in Cherry Hill, NJ. No, I do not own any property or real estate. This whole situation has me incredibly stressed, And I dont know when I will ever be in a stable financial situation to be able to start paying back this debt. My hours on my job vary greatly every week, and I am desperately trying to find something stable. As far as the back account with my boyfriend, I was under the impression that joint accounts could not be touched – how can they take money away from someone who has nothing to do with this situation? How can they prove whose money is whose? I cannot tell you how devastating this would be to both of us if this joint account were to be levied-we would be completely ruined. I want to pay back this debt, but for the right here and now I want to protect what little money I do have so that my children and I can survive. What can I do to have this levy removed from my bank account? If PA has an allowance of 300.00 that cannot be touched, and that is what I have in the account, dont they have to remove the levy? Are there any laws stating how long they have to remove it after the letter of interrogatories is received ? Its been over two weeks now and i am getting desperate. Will every bank account I ever open eventually be levied like this? Is there any hope of trying to get this resolved so that i can move on with my life? Thank you so much for any assistance you can give me.

    • Michael Bovee says:

      Keri – When it comes to joint accounts, you and I would use common sense and think that a debt collector cannot levy and harm someone not party to the collection. The problem here is that collectors don’t care about that. They care about getting paid. Filing a levy and getting money from an account that has your name on it gets them paid. Can you get money that is not yours that was taken returned to your boyfriend? Yes, but it is a process. When this happens, it is unfortunately going wind up being YOU who gets to prove whose money is whose. I am sure you want to avoid this when possible. The best way to do that would be for you to remove yourself from the account. Continue to get paper checks from work and endorse them over for deposit, or cash them and pay bills with money orders etc., until you resolve the collection judgment.

      I cannot comment as to when the current levy gets removed and the 300 released back to you, or when/if the account would no longer be flagged anytime the balance exceeds the 300. It is a process that takes time, and will differ based different variables.

      Yes, you should assume that any bank account with your name on it will be at risk of a levy until:

      The collection is resolved.
      The account contains only exempt funds such as received from social security, disability, or other exempt funds. Even then you have to be sure no other source of funds are deposited.

      You should develop a plan to pay this collection off. You can settle it for less than the balance, but you need to have the financial resources for that. Let’s assume for a moment that you could settle the debt for half of the 8k. Can you come up with the 4k, and how long will that take? It does not have to be overnight. You could accumulate it over time while living and paying bills on a cash basis until you settle.

  2. Over 10 years ago we returned a vehicle and stopped paying on it since then we never got any letters about a court date to pay remaining balance. Out of the blue we received a letter saying they were going to levy my bank account until payment was paid
    Can they levy my account for unpaid car loan?

    • Michael Bovee says:

      What is the name of the debt collector the sent you that letter? Did the letter refer to the court where there is a judgment against you?

      The levy on your bank account requires a court judgment. And it is possible, unfortunately, to have been sued for the deficiency balance on the repossession and not known about it. This can sometimes be unwound.

      What state are you in?

  3. In the state of Utah, when trying to figure out when does the day of last activity starts on a repossessed car? is it the date when I made a last payment and the account became delinquent or when car was repossessed or when the car got sold??? My car was repossessed on April 09′ but I stop making payments about 5 months before it got repossessed, can I still be sued? I recived a phone call from the collection agency and they told me they legally had 8 years to sue me!!! Please help!!!

    • Michael Bovee says:

      The SOL for a written contract in Utah is 6 years. That time frame generally starts when you missed that first payment. You would appear to be passed the 6 year statute already.

      A debt collector telling you they have 8 years to file a legitimate lawsuit in Utah is false and misleading. I would want to run this by an experience collections violation attorney to see if they would suggest pursuing an FDCPA case on your behalf, and where you would not have an out of pocket expense. You can connect with one at 800-939-8357, choose option 5.

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