Is my social security and pension exempt from debt collectors garnishing?
I was forcibly retired last year and am paying 8 credit card bills -1 in collection - with an income of ss and pension only. I can't do it anymore. What do i do?
Is my ss and pension exempt?
—elliot
Short answer
Your social security income cannot be garnished at the source, and most pensions are exempt from garnishment too. A collector would first have to sue you and get a judgment entered in court. The risk that is left after that is a bank levy, on the money once it is sitting in your bank account.
Key points on this page
- Social security cannot be garnished at the source. Most pensions are exempt from garnishment as well.
- Nothing can reach your money until a creditor sues you and a judgment is entered in court.
- The remaining exposure is a bank levy, because the funds lose their protection in the eyes of a collector once they are on deposit.
- What a judgment creditor can reach, meaning bank funds, wages, personal property and a car, is set by your state exemption laws. The amount of protection you have may surprise you.
- Before it goes that far, weigh the alternatives: a lower fixed payment through credit counseling if about 2 percent of your combined balances is affordable, settling for less if you can pool roughly half your balances within 36 months, or chapter 7, which can cost under 2,000 dollars and removes the risk of suit, levy, garnishment and liens.
- Some people on a protected fixed income stop paying and accept whatever comes, because their income and property are already exempt. HELPS assists seniors and people receiving disability or VA benefits.
It sounds like you are asking what will happen if you stopped paying on all, or maybe just the account you already have in collections. The quick answer is that your social security income cannot be garnished at the source, and most pensions are exempt from garnishment too. You would first have to be sued, and a judgment entered in court, before there is any risk to your money from a debt collector. And what risk there is, given the sources of the income, would be when that money is on deposit in your bank account, so in the form of a bank levy.
If your situation reaches a point where you have to be concerned about how a debt collector will go about trying to collect on a judgment, you would then look to how much of your stuff (money in bank account, wages, personal property, car) is protected by state law. The amount of protection you have from creditors in your state may surprise you.
What state do you live in?
Bank Account and Wages – Limiting Your Risk from Debt Collectors
Before you react to how much risk you have if a creditor sues you in order to get paid, consider whether that can be avoided. Your not able to pay all 8 credit card debts today, so something has to give.
What if your credit card payment could be lowered, and fixed at a more affordable monthly amount?
Add up all of your credit card bills and then calculate two percent of that. Is that two percent much lower than what you are paying out to all 8 cards today? If it is, you are paying higher interest rates. If those rates are lowered (and fixed), would you be able to pay that amount consistently on your fixed income? If yes, read through the credit counseling section of my debt relief guide.
If roughly 2% of your consolidated credit card balances is out of the question, what about negotiating lower balance payoffs? Your credit card debts can be settle for less than what you owe once they reach a certain level of delinquency. If you are not making monthly payments to your credit cards, and saving up all the money you can instead, how long would it take you to pool together about half of your credit card totals?
If your answer is less than 36 months, settling these credit card bills may be the answer to avoid bankruptcy. Keep in mind that some creditors will accept settlement far lower than 50%. The review post about what major credit card lenders settle for is fairly accurate. Use that as a beginning guide to how much money you will need to settle with your banks.
You can post a list of your different creditors in the comment section below, with the balances as of today, and I can offer feedback about negotiation targets, timing, and prioritizing creditors who are the most likely to sue. Settling with the right creditors early can limit your risk of bank levy and property liens.
Put the Debt Behind You with Chapter 7 Bankruptcy
While bankruptcy is something most people want to avoid at all costs, I usually find they have not assessed the costs and benefits. While we talk about your credit card bills being affordable with credit counseling, or by settling for less above, chapter 7 bankruptcy is typically the ultimate in affordability.
Chapter 7 could cost you less than 2k from start to finish (I have seen costs less than 1k). Using bankruptcy you are able to discharge those credit card debts (and other bills), and once discharged, you remove any and all risk of being sued, or any type of bank levy, garnishment, and property liens.
You have to qualify for chapter 7 bankruptcy using an income means test specific to your state. And just like there are state exemption laws that protect you from debt collectors, there are state exemptions for what you are allowed to keep in a chapter 7 bankruptcy. If your stuff is valued at more than the exemptions in your state, you may look to a chapter 13 bankruptcy where you repay some, or all of the debt, over probably 5 years. But when it comes to people having to consider chapter 13, I have often found debt settlement to be a better alternative.
What if you just didn’t pay, and did nothing?
Some folks with too many bills, and not enough income and assets (such as being on fixed income from disability and social security), will stop making payments all together, and wait for whatever comes. If sued, and a court judgment entered, they already know they are not at risk because; their car and other personal belongings are protected by state law; they are not working in order to be garnished; wages are low enough in their state to be protected; live in a state where wage garnishment is not allowed; and funds like social security that are exempt are the only moneys deposited into their bank account.
Some people may feel that doing nothing is better than filing for bankruptcy, and there are many times I will agree. Check out the above interview I did with Eric Olsen, Executive director for HELPS. Eric and his team are available to help seniors, and those receiving disability and VA benefits, in order to protect themselves from all manner of debt collection:
This was a pretty long winded answer to a short question. My goal with this page is to bring the state exemptions from extra ordinary debt collection into focus. Anyone with questions or concerns about this topic can post in the comment section below. Please include the state you live in.
Need some personalized help?
I do offer a no cost initial consult to anyone trying to get their bearings on what to do about their particular situation. You can schedule the call using the Get Help tab at the top of this page.
I can usually offer actionable feedback in a brief call once I know the details of your situation.
You can post in the comments below anonymously, which I answer daily.
You can post in the comments of any of my YouTube videos.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
Call and talk with a counselor about consolidating your higher interest credit cards into one single payment. You can reach a counselor at 800-939-8357, and press option 1.
Who are the creditors you owe, and what are the interest rates?
I just had my credit report pulled and it appears that I have blemish on my account for $6,200 that is being collected by CASH, LLC. I reside in New York and was wondering how I should address this debt that was sold to MBNA. I am divorced and it appears that my husband who handled our debt stopped addressing payment. Unfortunately, the account is in my name. Can you be sued or garnished for unsecured debt in New York? Are there recommended agencies in New York that you could recommend. In advance, thank you for your time.
Desi – What is the date your credit reports show the account was last paid?
You can be sued and garnished in New York for this type of debt.
I can refer you to some helpful agencies. But first, what are your goals with this debt?
Thank you for responding so quickly. I believe the last payment that was made was over two years ago. I would like to come to some fair settlement and address payment. Ideally, I would like to work with an agency to accomplish this. What and who do you recommend. Thanks again.
Try calling 800-939-8357, and press option 1 if you are looking to work with an agency to establish monthly payments.
Call and talk to a specialist about settling the balance for less than is owed at that same number, but press option 2. Settlements are often going to be at the best savings when you can pay the negotiated amount all at once, or only split over a few months.
I Am being sued for non payment of a credit card by a collection agency, i do not work, just my SS and small pension can they make me pay from that, i barely get by month to month. thanks marianne
Who is the collection agency suing? What state are you in? Do you have other assets, like a home, that you need to be concerned with?
the collection agency is suing me on behalf of the bank, i live in the state of Indiana, no home no car, no assets.
Your fixed income is not in jeopardy of being garnished at the source for debts like this (when they become judgments).
Your concern will be bank levies should you mingle non exempt monies with your social security.
I would also suggest you contact a legal aid office nearest you about your situation and see if there is any assistance they can provide. You should ask them specifically about your pension type, and if it has protections that extend to when that monney is on deposit in your bank account (like protections for SSI).
I am 66 and have a judgement against me for debt incurred through a credit union.I now live in NC and my income consist only of funds from social security and a Florida teachers pension. Assets include household goods and clothing, and a car that is going on 13 years old with a 175,000 miles. Can my social security or pension be garnished? 7
You should be in good shape from garnishment at the source. My concern for you is from a bank account levy angle.
How much is the judgment for? Who was the plaintiff?
Judgement is 19,000. Plantiff is suncoast schools federal credit union.
I would run your scenario by regarding how much of your pension money, when on deposit in your bank account, is protected from judgment creditors in North Carolina. I can send you contact info to some that offer no cost consults. What is the name of a nearby larger city?
Was the judgment in a Florida court then?
A nearby larger city would be Charlotte. The judgement is debt acquired while I lived. In FL I moved to NC after my husband died and have been here 5yrs.
Larger city is Charlotte, nc. The judgement is debt I acquired while living in FL. I moved to NC after my husband died. I have been in NC 5 yrs.
I sent you an email with contact details to an experienced attorney I would call if I were in your shoes. He is not near Charlotte, but distance does not have to be an issue in these things. If it is, ask Chris for a referral to an attorney he may know in your area with the same type of law practice focus (consumer law and debt collection).
I am 69 years old live in Florida. My income is socials security and pension. I owe condo about $60k value. I have no savings. I have 2 cars. One is old one car 10 years old and the other one is a new car under bank loan which I m paying out now. I stopped paying most of my credit cards. What can happened to me? Can one my car be taken away? What is better for me to do?
Please post the names of your creditors, the approximate balances (round to nearest hundred), and the date you last made a payment to each account. I can better offer actionable feedback with that information.
Thank you for your response. Also, I apologize for my imperfect English.
This is info you asked me to post:
Original creditor Balance Last payment date
Premium Bank Card $600 February, 2014
Premium Bank Card (second) $600 January , 2014
Chevron / GECRB $500 January, 2014
Merrick Bank $2,200 October, 2013
Credit One Bank $700 December, 2013
Cerulean/Continental Finance $600 January, 2014
—————
Total: $5200
Of cause you know this is current amounts with accumulated interest from last payment.
Thank you for your help.
The total amount is just too little to file bankruptcy over. I would encourage you to be strict with a savings amount each month, and let that accumulate over time. If one of these accounts results in a local attorney contacting you, that will mean your risk of being sued is higher. Depending on which account the attorney is trying to collect, lets talk about it, and see if what you have save up at that point will help settle, or defend against the suit.
My Mother is having difficulty meeting her monthly bills. She is 71 years old and receiving Social Security and her monthly Pension. She and her husband have approx. $2000 income each month. She owes $11,000 in Credit Card bills. (1) If she uses a Credit Company to Restructure her debt to a reduced amount, Can she restructure the total owed to the Credit Companies and make monthly installment payments on this new reduced amount? Or will the Credit Card Company require the new amount paid in full. (2) Also, if she does nothing, can a lein be attached to her home , land or car. She owns her Home valued at $25,000 . Car is valued at $5000. Land Valued at $35,000. She lives in South Carolina
If you are referring to consolidating her credit cards through a credit counseling agency, and if she can afford one single payment of roughly 230 dollars each month, than that could be a workable solution. Call with her on the phone, or she can call on her own, and get an exact quote for the monthly payment: 800-939-8357, and press option 1.
If she were unable to pay at all, and one of the creditors sued and got a judgment, here is how she would be protected:
Wages are exempt from garnishment in South Carolina. I know your mom does not work any longer, but for later readers….
Cars valued at $5,625.00 are exempt from judgment creditors in SC. There are additional amounts of value that can be protected too, but that are situational.
South Carolina protects roughly 56k of home value from judgment creditors.
Household items are protected to 4500 dollars in value. There are additional protections of up to 5k more if other exemptions go unused.
The cash exemption amount is based on other exemptions not being used. Because her social security is completely exempt, I am curious how much pension she receives, and whether that should be treated differently than direct deposit.
All of that assumes she cannot afford the lower monthly payment working with a credit counselor to consolidate them all.
Sorry I forgot to add that I live in California.
The car is not exempt if you own it outright. California only protects 2900 of car value as exempt.
The equity in your home is not protected, but close to it if you are married, or qualify for additional elder citizen, disabled, or low income exemptions in California.
How much are the debts?
I own my home and have roughly 115,000 in equity, my car is worth 7500. I have two sources of income Social Security and a annuity that is a required IRA distribution it is only 560 a month. I am a 79 year old woman and I am considering not paying on my credit card debt anymore. Am I correct in believing that even if the credit card companies do sue me there is nothing they can take from me. I am just not able to pay them and make my monthly obligations. Thank you for your advice.
Hi Michael,
The interactions from CRN are very helpful. I am from California and this is my second issue. I had a small claims judgment for $2600 in Dec 2011 for an unpaid $6000 HOA fee for my home that was getting under water. Right after the court hearing I spoke with the collection personnel and we agreed that I submit a settlement request to the board but never got a response. The property foreclosed and I moved out in January 2012 and forgot all about it. Five days ago I received a letter from my employer saying that they got a wage garnishment order for $3100 (6/25/14) which does not include interest and will process it if they don’t receive a release order by 7/4/14. I called the law office from where the Writ of Execution came from (dated 2/28/14) and asked if I can pay lesser coz I cannot afford it but I may be able to borrow some amount. I was told that they can’t stop the process and will just incur more interest if I don’t pay. I don’t know what to do or how much time an Exemption can buy me. I need my salary as I’m a single parent, a full time student and working full time with one child in college and another in high school. I’m also taking care of my mother who has breast cancer. I occasionally get overtime but not regularly. It is not my nature to transact with collectors and I don’t know how to deal with negotiators so I get taken advantage of many times. What are my options at this point? Will the HOA still come after me in the future for the remaining balance?
Thanks
Olive
Other than the exemptions from collections in California I covered in the comment above, you can request a hearing to show the court how you are exempt from wage garnishment. If the papers you received are not instructive on how to request your hearing, call or show up at the court and ask the court clerk for help getting the hearing scheduled.
With all that you have going on, and the expenses related, you may find you are partially or fully exempt. You could stay that way for some time. The debt collector may try to continue to press the issue periodically, and you of course will have to address that each time, but you would buy time until you come up with the money to pay the judgment off, or negotiate a lower amount to pay off.
If the collection attorney is unable to garnish after the hearing, they may become more reasonable about accepting payments from you. Just be sure to only agree to payments you are confident you can afford.
Michael,
In following up on my earlier request, if the law suit is strictly for my wife, do I have to worry on the bank account that has both of our names ?
If Capital One refuses to accept my $ 2K settlement offer, what are my options?
Al
You could have to worry about joint bank accounts if a judgment is entered. Taking your wife off of joint accounts would remove the concern.
If you are unable to settle the collection lawsuit, you can hire an experienced collection defense attorney to defend the suit; navigate the collection process by being informed and alert until you save up enough money to settle the judgment; and in some instances (though perhaps not yours), stay uncollectable and ignore the judgment.
I have a judgment put on me in North Carolina for a credit card. I have now had a excemption of assets paper served to me. I do not own anything besided my car wich is the only one I have maybe worth 5,000 and paid for and my home wich is owned with my husband who is not on this credit card. Will the creditors be able to take my home or car? I do plan on paying for the credit card but this year is not possible as I have many other bills and I am expecting a child.
In North Carolina you have a 3500 dollar car value exemption from judgment creditors. You can use up to 5000 dollars in additional exemptions for your automobile if you do not use a homestead exemption.
You have 35,000 dollars exemption from creditors for your home. That amount nearly doubles based on meeting standards for certain elder laws in NC.
Your wages are exempt from garnishment in NC.
Your stuff (household items) is exempt from judgment creditors in NC up to 14,000 dollars, and can depend on whether you use a homestead exemption, or how many dependents you have.
I am trying to avoid bankruptcy for 13000 and trying to work this out on my own – But it looks like I have no hope 🙁
Thanks for the response Michael!
Hi Michael …..Previous Forum: “ Capital One said charge off will be on 06/23… I live in Florida , I have a minimum wage part time job and I receive child support, all together makes a $1200 income plus food stamps ( After 15 years married I never though I will be on food stamps help), ….but now capital One will charge off credit card account on 06/23 (180 days) I am so afraid of what is going to happen if aggressive collections start and if they sue me, I just can’t afford a lawyer again(after divorce). I live in my house the mortgage was fixed to 40 years loan modification on 12/2012 because was underwater and my car ( which I need it to go to work- but its not paid off) are my asset.
I f They Sue me and I don’t have the money to pay them…Would they take my asset and wage?
It sounds like not Hope for me….. please help
Nora – Read my responses to Bill higher up in the comments above. He is also from Florida.
If you are unable to settle the account with Capital One, and if collections to reach the courts and a judgment is entered, know that you can stop all collection activity on an account like this with bankruptcy. Chapter 7 will discharge a debt like this, while chapter 13 will force them to accept the amount of money the court tells them they are allowed to receive.
Capital one accepted settlement, and i received it in witten by mail. But i am not sure about what it says on my credit. They say ” ….at completion of the settllement the remainder balance of your account will be written off and the credit report will be updatef to show the account as settled with an outstanding balance…” Is it correct?
Norma – If I were you, I would:
1. Wait until after I pay the settlement according to the terms so that I am out of harms way, and then file a credit reporting complaint with the CFPB asking how it is Capital One can continue to report a balance owed when they agree that there is no balance; that the debt was settled via the agreement they accepted; and even informed me that they are required to tell the IRS about how they have forgiven the remaining amount (therefore not owed), so that I can include the forgiven amount as income for the current tax year. I wrote about this issue a few years back: https://consumerrecoverynetwork.com/why-does-capital-one-hate-america/
2. Contact an experienced FCRA attorney in my state and share all of this with them, and see what kind of advice they have to offer.
Thank you so much for all your help. God bless you.
Hi Michael,
I made my last payment of the settlement with Cap.One. …Now, What? DO they have to send me another letter or something or Do I have to call them?
Please advice
What was the date of your last payment?
Pull your credit reports and look to see if Capital One is still reporting a balance owed, but that the account is settled. Please post an update with what you see.
I just made last payment on 9/23/2014. I went to see my account online, it shows my next statement and minimun payment due 10/23/2014. But it also show : This account is currently restricted….
Check your free credit reports at http://www.annualcreditreport.com to see how Capital One updated your settlements later this month, say October 23rd. If you have already used your free access in a12 month period using that site, try one of the free credit report card tools at http://www.credit.com.
When you see what Capital One has updated their reporting with, post that and lets go from there.
I was thinking on on sending an e-mail to Mr. Richard D. Fairbank
President & CEO ( that is what I did when I requested the settlement).
This is (help me out) what I think I would say:
Mr. Richard D. Fairbank
President & CEO
Ref:: account # xx-xx-xx-xx-4832 /completion of the settlement
I paid in full the settlement according to the terms .
Now, reading again The settlement letter. Lets read number 8 on page.2 of the settlement letter:
….”8. Credit Reporting of Your Settled Account: If we report your settled account to a consumer reporting agency (credit bureaus),
we will report it as settled for less than the full balance” …..
BUT its contradicted on page 1 said ….. ” at completion of the settlement the remainder balance of your account will be written off and the credit report will be updated to show the account as settled with an outstanding balance…….” As per my understanding it only should be reported an accurate information to the Credit Reporting Agencies, therefore it should be reported/updated to show: …..the account settled for less of the full balance”…. Remember,Capital One agree that the debt was settled via the agreement accepted by both parties; and even informed me that they are required (1099-c ) to tell the IRS about how Cap.One have forgiven the remaining amount, It is on number 7 of page.2 of the settlement letter.
Be advice, Not balance is owed…..because, The above Account has been settled for a lesser amount agreed to by both parties, and cancel/forgive remaining of principal on the debt. Therefore should not be reporting as outstanding balance like it is still due and owing when it has been forgiven (1099-C ). IT would falsely (FCRA) the requirement to report. Only complete and accurate information to the Credit Reporting Agencies.
Therefore Credit Report should be updated to show: …..the account as settled for less of the full balance”..so, credit report not to contains erroneous information.
Please advice
You have some typos and grammatical changes to make, but I would fire something like that off if you are inclined to.
What are your expectations for sending this to their CEO?
Depending on what you see them update, and because I already saw you care about the issue, and would follow through with some suggestions, I would send you direct to the CFPB to file a credit reporting complaint against Capital One. But only once the nature of the updates are known. Capital One has their settlement agreement wording, as you point to, but I would wait to see what they actually report first, then follow through.
If you send the CEO letter first,and they make no corrections, that will become another element to your story (not a bad thing).
I will wait then….. and i will check my credit report https://www.credit.com. next month to see what was reported to my credit. Another thing is that I received their statement today a regular statement as every month…… I dont know what they are doing…. Why should I rcvd a statement if we agree on settled this account, and they already rcvd last payment? Is it normal?
It is normal for some original creditors to continue to send regular billing statements until your agreement to settle is paid in full, and their system has updated with that fact. But mistakes happen too.
You will have a full grip on all of this within a month, and can then take steps to correct anything necessary.
Thanks for your help. !! I was just trying to let Cap.One know in advance that after a settlement they cant report me with an outstanding balance…..I will post an update with what I see in my credit report next month…
Hi Michael
This is an update., They have sent me a letter ..” Thank you for your payment of $ xxx.xx This payment completes the settlement on your Capital One account and we’ll stop collection efforts on the remaining balance. As part of this settlement agreement if we canceled $600 or more of principal on a debt you owe, we must provide a 1099-c tax for to you and IRS. If we are reporting on your account, we’ll notify credit reporting agencies that your account has been settled for less than the full balance. The credit report agencies may take up to 90 days to update the information on your credit report” signed by Recoveries Specialist……
Does it sound like I am going to be OK? What do you think?
Thank you
Please advicce,
You are okay with anyone trying to collect on this account. Be sure to save that letter and proof of payment in a safe place.
You are not yet in the clear with credit reporting. You will want to check your credit reports to see that they update the account as settled. When you see that updated, also look to see if there is a remaining balance showing as owed. Let me know if they continue to report the unpaid balance as owed, along with reporting it as settled.
I would check after 30 days if the updates have not occurred as of today.
Update…
Capital One on my credit report. was paid /Settled less of full balance…… but. it says closed/Derogatory, why?,Should it say Paid (Closed).,??? It was paid by agree settled and they sent me a 1099 which I put it in my taxes… Please help, what to do, now? .
Norma – Please review this post about Capital One settlements and credit reporting. Tell me in the comments on that page if that is what you are seeing (with the portion they forgave and sent as a 1099c still showing as owed).
If they are showing as settled for less and the account closed only… that is typical.
I am disabled/lifetime, and on fixed income under $1,000 a month. I own a car paid off in my name only. I am 63 and live in southeast Michigan. I live in a senior subsidized apartment.
Way back in 2007 approx my son and daughter inlaw (whom I was living with at the time) needed a vehicle as theirs was toast. The only way they could get the loan was with my co-signing for them. They basically had a rough time paying but they managed with only 2 payments put in the back of the loan. 2 yrs ago Xmas eve, my son was in a serious accident, and the suv basically toast. The insurance company totaled the suv and paid off the loan directly from the finance co. My son’s lawyer said he no longer owed and the debt pay off was accepted. Now I am being harassed from Midland Credit company for the “balance owed” My son’s lawyer said I don’t have to deal with them. Ok, fine, but I am the one being harassed.
2- 6 calls a day. 7 days a week. My bills are paid monthly and I am up to date on anything I owe. My car is paid off. I own an 05 Chevy. son said it is worth less than $4,000 at this time.
Being it has hand controls and set up for me to use, I am fearful that this company will take my car. I cannot go without a car. What are my rights in Michigan. Every month, I pay off my bills owed and take the balance left minus $5 and take it out of my bank. I am worried about this mess. Oh by the way, the dealership my son dealt with was raided, for unscrupulous loan practices (fraud) and closed down. My son’s car debt went somewhere else. I have no idea if he even has any of the paperwork. So, I need an idea of what my options are.
Thank you
Laura
Michigan protects only one thousand dollars of vehicle value. I am not aware if handicap and modified for disability vehicles enjoy more exemptions. That said, Midland Funding would likely not pursue collections through your vehicle given the details you shared (if they knew them). But have you been sued on this debt? Is there a judgment?
Was sent a letter last spring, basically telling me I owed them x amount of $’s. It was not a notice to show cause or judgement. Never been served either. They cannot get into the building I live in, as it is only by my buzzing them in that would allow them to serve me. I really doubt that they would go that far. The phone calls are on going, they are using another number now, but the 877 gives them away. Either way, I will not speak with them.
They must know my social security number that I have nothing. Son says he thinks it is just that, they think that I will get frustrated and pay them off. They know nothing about my car, as far as I know – and I have been told to not give them any information.
Laura – In my experience and opinion, you should tell Midland everything you outlined in your posts. They would likely have no interest in trying to collect from you afterward.
Read this Midland pledge to consumers. Yours is the type of fixed income situation they will look to cease collection efforts on, let alone the fact this debt should not have anyone collecting on. And that consumer bill of rights is something I see them follow.
If you do not want to call them and tell them all of this, write to them… copy and past our comment exchange in a letter identifying yourself fully… but communicating with them is how to get this behind you.
Hi Michael, By your suggestion, I did contact Midland in their website. They had a form to give them some info, and what is the exact reason why I am asking them to stop calling. This was on August 4th. The phone calls continued for 3 days after that. Since the 7th, I have not heard a thing from them, I asked them not to call me and why, like I had explained to you. The silence is golden, however, what happens if they start up again? Then what? Hoping that my case doesn’t get sold to someone else and it starts up all over again. Those companies love to do this. However, at the moment, no calls. Do not want to see the other shoe drop! lol Thanks again. Laura
Midland Funding rarely resells their accounts. I would be surprised if they sold yours.
If something does pop up, post an update and lets go from there.
Thank you Michael, I am feeling a little less stressed. Here’s hoping I don’t need to contact you again, I thank you for leaving the door ajar for me if Midland does a flip… Thanks again and have a great rest of the summer.
Laura
Hi Michael, It has been over a month since I first made contact with Midland in their web site. Nothing, no phone calls, no mail, no nothing. Just thought I would update you on this wonderful silence. I sometimes check my phone to make sure it is working…haha. Still concerned, as I am still not certain they will continue to stop calling and communicating. Time will tell I guess. Thank you, and I hope I will not have to ask for your help again. Trying to pay down what credit cards I have as I would like to keep my cards for emergencies (that was my original intent) I will not stop paying on them and I pay more than asked and never late… One day I can take off my life vest and relax…
Thank you for posting the update about Midland Laura. It would be great if you continued to do that. One thing I miss about working paid client files is that I got to start from scratch with all the issues, and share in them getting resolved along the way. By focusing most of my time on the site, and offering feedback with a certain level of non commitment, I do not get to hear about nearly as many outcomes as I would like 🙂
Thank you Michael, Oh, believe me, I will keep your postings.
Like I mentioned before, I hope this business with Midland is over with. However, I will be happier when 6 full months have passed. Ha Ha.
Hi Michael, 7 months have passed since I made contact with Midland, and not one call , mail, or email has been sent to me.
Now then, I am wondering since my FICO score is so bad, Transunion has me listed as in the low 600’s and at the bottom it states Midland, non payment. It has been close to 7 yrs since the original loan was made in Las Vegas NV where the suv was bought. How much longer will Midland chose to keep me posted as non payment? I live in Michigan. Thanks
It can take up to 7 and one half years starting from the date of your nonpayment for the original loan to drop from your credit reports. Midland Funding’s credit reporting should fall off at the same time as the original.
When was it your son would have been considered late? Was it at the time of the accident? When was that precisely?
My son and his wife were beginning to pay late right from the first year of their loan. I believe it was within the 2nd yr of the loan that I had to agree to put two payments they didn’t pay on the back side of the loan in order for them to keep the suv. I didn’t want to do that but they didn’t have another car but mine, and I was not about to let them use mine. The car loan was in my name with my daughter-in-law., and I ended up getting taken to the bank so to speak. With their inability to make payments on time, we had to change the loan payments. If I remember right, they only started to pay on time after my daughter in law had a better job. Now then, when the accident happened 4 yrs ago, the insurance company totaled the suv as it was really messed up. The insurance company contacted the loan company which held the loan, after several loan companys bought and sold this loan. This specific loan company then proceeded to tell the insurance company what the pay off would be, they neglected to add the back end of the loan, which amounted to 2 payments. The loan company then decided to come after me to pay them. So, this is starting to become a nightmare, because I will be stuck with this for yrs. Even though Midland was the last company that handled this. Now then, the insurance company told my son, that the pay off was accepted in full. So, I am not even sure my son has the original’s loan papers, or anything. Midland did stop contacting me, after your advice, but now they have this nasty notice of non payment on my credit report. How in heavens name am I going to clean this up? I have no access to any of the documents which my son had. He is still recovering from this accident with head and brain injuries. So, his memory of any of this is foggy. He cannot help me with this.
Sorry for the delayed response Laura. I had to turn off comments to this page until someone could help me remove a subscriber who wanted to stop getting updates, but for some reason could not be deleted from the site.
You could try disputing the Midland Entry with the credit bureaus as paid. Based on what you shared in the above comment, it was paid, but a residual of the debt mistakenly made it into a bundle that was sold off to Midland. Send your dispute in writing via certified mail return receipt.
Midland may just drop it when they hear from the credit bureaus.
Hi I am continuing from your other site, as requested.
5 questions:
1.Will the ECMC non judgement account I have (private school loan) drop off as it says?
2.Your saying, with the 1 judgement School (private loan) I should contact the courts and just start making payments? Or could I ask for one time judgement delete (Oregon)? What ever it is called forgot.
3. I have 5 old loans that has a balance of $0 closed 7/2009. It is scheduled to be removed 6/2015. Will this drop off ?
4. If I have 5 bad credit accounts taking care of and they drop off how much will my vantage or Fico score go up? 99% of my debt is over 16 years old. My Transunion score is 599. My Vantage score is 655. Don’t know my Fico score.
5. I hear negative and positive things with getting another credit card to raise credit score? I have finally an opportunity to start fresh here and am so CAUTIOUS on everything this time around. I need to buy a house, rent $$ is going no where.
Thank you and your so appreciated, seriously.
Mary
P.S.
I won’t do anything until I have a very clear understanding of my situation and what to do. I am so nervous! 🙁 And checking for your reply constantly all day lol! 🙂
Thanks for moving the discussion about the collection risks for the judgment over to this page Mary.
1 & 2. The judgment showing on your credit report has a shelf life, just like the other collections accounts that have dropped off already, or are scheduled to. But an unresolved judgement, even though not appearing on your credit report any longer, can still be collected on, and can still prevent access to new credit prouducts, like a home loan.
Here are some exemptions in your state:
Up to 25% of your wages can be garnished in Oregon. If your income is lower than the federal standard (least favorable to you), you can show the courts in Oregon how your wages are too low to be garnished.
A car valued at less than 3 thousand dollars is exempt from judgment collectors in OR.
Your home is protected up to 40 thousand dollars, and 50k if married (included this for other readers).
Your personal stuff (household goods), is exempted from extra ordinary collections judgment creditors have, but only up to three thousand dollars of value.
Oregon protects deposited wages in your bank account. And there may be a 400 dollar wild card you can use for protecting money in your bank account from collection by judgment creditors.
As I mentioned in my reply on the other page, judgments in Oregon are collectable (using all of means above) for 10 years, and can be renewed for another 10 years. Renewals are simple and inexpensive, so 20 year collection time lines are realistic.
I do not know what a one time judgment delete in Oregon is. But the only way to get a judgment out of the court record is to get it vacated. It is not easy to do, and for most people, would be best attempted by retaining an attorney familiar with the process, which has its costs and no guarantees.
You would want to contact the judgment creditor, or the attorney they hired to sue you, and not the court, in order to set up payment arrangements. If I have not heard from anyone about this debt for some time, I may consider pulling together all of my resources and/or taking the time to save up half or more the mount owed, and work on negotiating a lump sum settlement offer instead of a payment plan.
How long would it take you to come up with half the amount owed on the judgment?
3. Those accounts should drop off as scheduled.
4. I cannot guess at how much your credit score would improve from old negatives dropping off as scheduled. Your score is factored using many criteria. Late pays and collections are only part of it, and each of us has a unique profile. But from what you shared, you score is held down as much from lack of recent positive credit, as much as old negative collections.
5. It is good to be cautious of credit advice. But it is fairly common to help rebuild your credit using unsecured credit cards (having one or two open with good payment history and low utilization).
I recommend the tools and details offered by credit.com that can help you understand what to, how to, and even who to use, to help rebuild credit.
You can get FHA type underwriting approval for a home loan with low credit scores. The judgment will be the first thing in the way of accomplishing that.
Thank you VERY much.
I am going to write a letter to the creditor who is suing me offer the judgement to work out a payment plan. ( If I can not come up with a lump some to settle fast enough).
I will wait for the others to drop off.
You say this will drop off? “Will the ECMC non judgement account I have (private school loan) drop off as it says?”
#3 I have a Capital One Master Card Platninium in Excellent standing, but just got it. Your saying, I should have one or two UNSECURED credit cards?
Thank you.
If I were rebuilding my credit from near scratch, I would look to establish 2 unsecured accounts, and one secured loan. The ideal secured loan for many will often be a vehicle loan.
Who would though approve a loan or approve a unsecured loan for me? Again my Transunion score is 599 and my Vantage score is 652 not great. I was shocked to get a Capital One credit card. Can you suggest 2 secure card companies and a car loan place?
Oregon
Hi Michael,
I tried reading back what you said to do with this one?
I have four school loans that have the same acct number with different amounts of money showing. Is this right? Also these were opened in 7/2009. Although the original delinquency was in 2003 ish . And is suppose to be removed 6/2016
Will it drop off as said? It’s is not a judgement.
Who is it that is reporting these ones?
ECMC from Oakdale, MN reporting these.
Placed for collection date is not true. It is old acct past 7 years.
It reads: Placed for collection : 7/16/2009 (which isn’t the correct date unless it was sold then started as new from what it looks like.) This is from LVNV last. Prior to LVNV was Wells Fargo EFS (Educational)
Scheduled to be removed (all of them same acct#) 6/2016
Last updated by ?? 06/1/2014
I applied for (doesn’t affect my score card app) a Unsecured Bank One card and I was denied.I think I should wait til I clean up what I can on my credit file then apply. 🙁 I won’t give up. I dream to have a credit score above 750 :))
I am nervous because they were not polite in the past. The judgment owing $3, 540 is from LVNV Funding LLC.
My experienced with LVNV, whether negotiating with them on behalf of clients, or coaching folks to do that for themselves, is that they are one of the easier collectors to work with.
If you are working with a different collector, like the outside collection law firms LVNV may hire to collect, it can be a bit daunting. But I still recommend calling and negotiating, followed by getting everything in writing before paying.
Ok will do asap. Thank you.
sites.google.com/a/financeknow.com/www/credit-counseling/removal-of-lvnv-funding-off-your-credit-report
Can you read this site I had read a few days ago. And your thoughts? It seems like it is saying since it is beyond 7 years it will drop off as said it would.
Read:
“If your SOL has expired, and you have found listing of LVNV funding on your credit report, send them the letter and push them not to contact you whereas with non-expired SOL you would ask them to validate your debt so that you get the real picture that you owe the debt.
Sometimes, you get LVNV listing on your credit report after a period of seven years and one hundred eighty days; in this situation you have legal rights to take credit collection agency in the court for creating disturbance to you. You should also contact credit bureaus requesting them to remove this listing immediately since it is legally not viable to show LVNV on credit report once this time period has lapsed. “
Is LVNV not the one with the judgment?
It is the judgement one. Date Filed 3/26/2008 and Last updated 6/19/2008
I guess since it is in judgment like you said I need to work it out with LVNV and even if dropped off my report it will haunt me after when I want to buy a house.:( If so, I will send a letter to LVNV.
HI Michael,
I am in California. I have just received a writ of execution from a collection attorney representing Capital One. They Sued me in 2010. I never went to court, i simply agreed to a payment plan. The original debt was for $250, yet I had fallen on bad times and had let all credit payments lapse. At the time of the Judgement they wanted $1650 which included debt. court costs etc. I started making payments and I thought I had completed them but I did not, apparently, I still owed $200 of that original debt and so now they are asking for a total of $975 more attorney fees etc.. The Levy has not yet been placed in my account although I was served on May 22, 2014. I talked with the Attornys office about payment plans etc. but am unsure if I should start paying them until this levy hits my account. Also, not sure about how to proceed with making deposits, paying bills etc. I don’t want to bounce check, have car isnurance lapse (on automatic withdrawals. and all of that. Also, I am concerned about making more payments,thinking I am done and then them coming after me again since I thought I had paid it off last year and now this! if they are adding 11 cents interest each day how do I pay in full and have them not come back to me a year later with more interest, etc. Any advice would be greatly appreciated.
Thank you,
Crystal
If you are able to pay the debt off in its entirety, call and get an exact amount owed, and submit that payment. Take good notes of the date and time of the call; the number you called and extension of anyone you are connected to; everyone’s name etc. Record the call, and tell them why. Ask them how long it will take them to update the court that the judgment is paid, etc.
As far as the bank account levy goes, California protects deposited wages. You can talk to an attorney that represents people against debt collectors regularly in California, and learn more about whether, in their opinion, it is better for people to not deposit their paychecks and pay bills from their account like normal, until the collection is resolved. If you do choose to pay bills a little differently than usual until you knock this down, I wouldn’t disagree.
While not part of your question, I should point out for later readers:
California protects 40 times the state minimum wage for an individual from garnishment.
A car is protected from judgment creditors in California up to 2900 dollars in value.
Your home equity is protected up to 75 thousand, and 100k if married. There is more protection if you meet certain elder, and low income qualifications.
All of your household goods are protected from creditors in CA.
Thank you Michael, this is very helpful. You are Awesome
So to clarify, even though I may have a levy, under law it may not actually affect my account due to the CA law about wages? The deposits I make are paychecks. If I pay the balance and then the levy hits my account, will the funds be returned to me? I understand that the court puts a hold on those funds only? So, I could in fact, be out the money I pay the collection first and whatever money is in my account too if I continue to try to use my account. I read on the local sheriff website that the levy needs to be in effect within 180 days of the service of the writ, so I could potentially have my account affected at any point within that time frame should the resolution take a while? Oh, boy, sorry more questions…The bottom line is, pay it off quickly and get proof, right?
Thanks again!
Crystal
You got it. That is the bottom line. And be sure they file satisfaction with the court asap.
If anything weird does happen, you can resolve it in a matter of days with the right documentation.
Thanks again!
Hey Michael I moved to this page as you requested. My home state is Florida. My concerns are that I will have to borrow money to offer a settlement to PRA and if I can not borrow enough to satisfy them then what would be worst case scenario if they do get a judgement against us. What might we expect? Garnished wages, seized vehicles… What do they do to get the money?
Head of household wages are well protected in Florida. Based on what you shared in your other post, your not working, and your spouses wages would probably not be at risk. I can refer you to an experienced debt defense attorney nearest you to talk about this concern in more detail.
Florida will protect up to 5 thousand dollars value of your car (1k, plus up to 4k of any unused homestead exemption, but that must cover household goods not covered by the 1000 dollar value of your personal stuff.
Your home exemption has a limit on acres, but not dollar value. Do you have much acreage with your personal residence?
No SIr, We do not have any acreage only the small lot that our home is built on.
I do have a small start up business, yet it is not generating an income yet, so I’m guessing my Wife would still be considered head of household. Correct? If so, then our only property at risk would be any vehicles that are in my Wife’s name or can they go after vehicles in my name (or both names) as well? Also, how would a lien on a vehicle affect the case? Remember the debt that PRA is after is in her name only.
In addition, I would like the reference to a local attorney that you offered.
I would say that your wife would be considered head of household for the purposes we are discussing. You can run that by an attorney you call to consult with. Post the name of a nearby larger city in Florida. I will email you contact details to all with the experience you need.
I do not see Portfolio Recovery chasing down a vehicle lien on a debt this size after a judgment is entered. Here again, talk to the attorney about that. He/She will have on the ground experiences they can relate to you about how often that is a concern for someone with your set of circumstances in your state.
Jacksonville. Thank you for your time!
UNIFUND CCR has a judgement on me. For $7000. They froze 3 joint accounts I had for $2000.
I am disabled but I have no income, my husband supports me. He has opened a checking account in his name so we can pay our bills. We live pay check to pay check.
I am scared because if I didnt have bad luck, I’d have none.
The order says to Glenn Mass, court officer is ORDERED to levy execution against goods and chattels, then it gives a list of all the things they can take like vehicles, bank accounts, jewelry, fur coats, instruments, electronics… Etc. to be sold. Local police are asked to assist in this writ, which expires 5/19/16. This does not authorize entry to the residence with force.
We have one older vehicle a conversion van that does not run in my name, and our 2003 car in his.
How likely is it that they will come to my home, do they have to give notice And how soon could it happen?
Thank you
Eyelene
Up to 7500 dollars in value is protected from judgment creditors in Massachusetts.
You have up to a 15,000.00 dollar exemption for your household goods in MA.
Massachusetts currently protects up to 2500 dollars on deposit in your bank account from judgment enforcement. Did the account freeze exceed this in aggregate?
How does all that stack up when you consider the value of your van, and other stuff?
You will not get much if any notice of an attempt to execute a writ.
Oh, i am sorry, I am not in MA I am in New Jersey. I was wondering why you wanted me to go to this page. Van worth $500. Car maybe $1000.
Sorry about that. I saw “Mass” in your post, and well….
I do want the focus of this page to be about exemptions from extra ordinary collections that can accompany a judgment against you, no matter the state. And New Jersey is just not a great place to be for consumer protections.
You have a 1000.00 dollar exemption for personal property (car) in New Jersey. You can add a 1000 dollar wild card for house hold stuff. The van in your name is probably good, but the household stuff is set really low for you.
Hi you seem very knowledgeable in the state of MA.. I got a summons in the mail for a magistrate hearing for a 3,700.00 debt for a credit card that went into collections and now to a lawyers office in MA. This all started while going threw my divorce. I’m collecting SSDI only but could give them 50.00 a month. Should I do this? Try and make a payment plan? Will they drop the lawsuit? I’m scared. Thanks, Lisa
What is the name of the plaintiff and the also the attorney collection firm suing?
It is a third party it started with GE Capital then portfolio recovery now to a law firm called Lustig, Glaser & Wilson pc out of Waltham ma and I live in Wilmington Ma
Unfortunately, PRA is not going to dismiss the case based on your fixed income, nor with the offer to pay $50.00 a month. And I am not a fan of paying that low of an amount that would likely just get eaten up by judgment interest.
Have you checked in with any low income legal aid offices nearby? Some offer debt collection defense assistance. If you have one near you that does, you should speak with them about whether they take on debt collectors like PRA.
Other than that, I do see PRA settle collection lawsuits for roughly half, and occasionally lower.
You know from this comment string that state law in MA provides some fairly good protections from judgment creditors. Sometimes it can be better to approach resolving debts when your financial situation improves.
Are there other debts outstanding besides the one PRA has, and if so, what does all your debt add up to?
Okay so what if I settle the debt before the hearing then what? Does it end there? I just want to get rid of this and want to make sure there is NO judgement against me. Now on the money the lose when settling do I pay taxes on that?
Be sure you negotiate the case be dismissed upon payment of the amount you get them to agree to. That will keep the judgment from being entered in the court and showing up on your credit reports.
You can be taxed on forgiven debt in excess of 600 dollars, but not always. Learn more about how to avoid that tax here: https://consumerrecoverynetwork.com/debt-forgiveness-taxes-settled-credit-card/
Ok hopefully last question.. I’ve come to a settlement agreement on the one I’m being sued for and they will withdraw the lawsuit. My question is.. I have also a small debt in collections that we also came to an agreement on and they want me to make payment today. Is it okay to give them my checking account info over the phone? I have two and this particular one I only keep 50$ in never anymore than that.
I like to get settlement agreements in writing before payments are made. When timing is important you can record any phone call you have with a legitimate debt collector, and tell them you are recording the call for proof of the agreement since you have no letter in hand.
I also like using a separate bank account for payment to debt collectors and settlements.
Hi Michael,
My mom is 72, lives in Arizona and works part time. She is spending all of her retirement money to stay current on her credit cards, but it is becoming too much and she is afraid she will be unable to retire in the years ahead.
She wants to stop paying on her cards, but does not want to go through bankruptcy as she did this 10 years prior. Her main concern – if she stops paying on her cards – is will social security be garnished (seems from your post above that this answer is ‘no’), will her pension be garnished, and most importantly, will her wages be garnished.
She’s desperate to get out of this situation; she’s worked since she was 14 years old and her prior debts were the result of medical care for her two daughters which wiped her out. She’s an honorable, hard-working but aging woman and we so want her out of this increasingly difficult circumstance. At the rate she’s going, she’ll have nothing left of her retirement savings in the near future.
Thank you in advance for any help you can offer.
Sincerely,
Deborah
Up to 25% of wages can be garnished in Arizona as the result of a judgment if your mom is sued by one of her creditors (or later debt collectors). There are partial/full exemptions from garnishment that can later be established with the court, and with a part time job, she may meet them, but the social security and pension income will skew that.
Her social security is exempt from garnishment. The concern I have is that, were there a judgment from her unpaid credit cards later, she would have her social security deposited in the same bank account as her other income sources. Arizona protects only up to 300 dollars in a bank account (that could potentially be more if the money on deposit only came from exempt sources like social security).
She could have 2 accounts at the same, or neighboring banks. One exclusive to social security (and maybe the pension), and one used for other nonexempt deposits.
How much of her monthly income is from the pension?
Does she own a car or home in Arizona?
Thank you, Michael. This is very helpful to know.
First, she owns her car outright, and she rents her home.
Second, here’s her income breakdown in a nutshell:
1. She gets $1,321.00 a month from social security.
2. I found out from her today that she has a 401K plan at her job, which she considers her “pension”, but is really a 401K. There is about $2,000.00 in it so far and she is sure it will never get to more than $4,000.00 or $5.000.00 before she simply must retire for age reasons. She has withdrawn from this already to pay for bills.
3. She also gets $135.00/month from my father’s pension (a genuine pension) that was part of their divorce agreement.
4. Her current income for her part-time work is approx. $1400/mo.
5. She has no other savings or retirement monies or accounts.
Hopefully this clarifies the picture. At 72 years old, we need her to be putting as much away for retirement as possible. She is at an important juncture now in terms of her credit cards and how trying to pay them is both straining her present day finances (not to mention her health) and markedly reducing her future capacity to retire before she simply cannot work anymore.
She has $25,000 in total credit card debt, BTW.
Deeply appreciative of your good help.
Warmly,
Deborah
For my part, were I in her situation, I would file for chapter 7 bankrupt and discharge the credit card debts. I would advise my mother to do the same. There is just nobody at the banks she has credit cards with, and none of their shareholders, that need that money more than her right now, and in the future. Unless there is a compelling reason to rebuild her credit for a major purchase, I see no utility function with preserving credit right now. With her limited income, and the bills she has, her debt to income is toast,and shows she cannot afford a new payment anyway.
If she is bent on avoiding bankruptcy, she is going to experience any myriad of collection calls and letters, and likely one or two will end with collection in the courts. Doing nothing when you cannot afford to pay bills is an option, but a temporary one.
How much is her car worth?
Hi Michael,
Her car is worth $5K – 6K at the most.
Thank you. I’ve been sharing your feedback with mom and she is most grateful.
Look forward to your reply,
Deborah
Arizona protects your car value up to 6k from judgment creditors, so that is in the clear too.