Collections Law/bank levy

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Expert: Creditwrench - 10/12/2008


Question
Currently I have a judgment against me for medical debt that I incurred in Ohio where I live, and I may soon have judgments against me for credit card debt.
I currently do not have any bank accounts or credit cards but I need to open up a bank account to make business run smoothly (I am a self-employed sole propritor).
Before I open up a bank account, I need to know the answer to some questions:
Question # 1:
Can a bank account be levied for the full amount of the Judgement when there is less than that amount of money in the account? If so, are all monies deposited thereafter automatically seized and sent to the creditor until the debt is paid?
2. If I open up a bank account in another state will it be safe from levy for:
  a. medical deby incurred locally in Ohio where I live?
  b. credit card debt owed to Discover, Capital One and WAMU?
3. My wife (who also owes lots on local medical bills) does not work and we have 2 young children. There is no credit card debt in her name.
If my wife opens up an account in her name in another state and I sign all the checks that my business receives over to her so that she may run them through her account to turn them into usable cash will this cause the IRS to declare that she has income and cause her grief? Is there any other problems that you think would come of such a way of protecting assets from levy?

Answer

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  Currently I have a judgment against me for medical debt that I incurred in Ohio where I live, and I may soon have judgments against me for credit card debt.
I currently do not have any bank accounts or credit cards but I need to open up a bank account to make business run smoothly (I am a self-employed sole propritor).
Before I open up a bank account, I need to know the answer to some questions:
Question # 1:
Can a bank account be levied for the full amount of the Judgement when there is less than that amount of money in the account?
Yes.

If so, are all monies deposited thereafter automatically seized and sent to the creditor until the debt is paid?

Depends on your state laws. Some allow ongoing garnishment and others don't. You need to find that out from state statutes.

2. If I open up a bank account in another state will it be safe from levy for:
 a. medical deby incurred locally in Ohio where I live?
 b. credit card debt owed to Discover, Capital One and WAMU?

Not if they find it.

3. My wife (who also owes lots on local medical bills) does not work and we have 2 young children. There is no credit card debt in her name.
If my wife opens up an account in her name in another state and I sign all the checks that my business receives over to her so that she may run them through her account to turn them into usable cash will this cause the IRS to declare that she has income and cause her grief?

Probably.

Is there any other problems that you think would come of such a way of protecting assets from levy?

One trick you can sometimes use when accepting checks is sign the back of the check in the presence of the maker and then have the maker sign again under you. If you do that then you must take the check directly to their bank for cashing. That way the checks don't go through your account and since the maker of the check has guaranteed your signature you don't even have to show I.D. to cash the check but they will probably demand a finger print which you can usually smudge up pretty good. Get some vaseline on your hands before you go in and that will make smudging pretty easy. Another is some black axle grease on your fingertips. Fills in some of the swirls and makes the print almost worthless.  

Creditwrench

Expertise

Debt Collections law, Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), federal law, how to properly answer court summons for collection cases, how to prepare federal cases against debt collectors, how to deal with debt collection phone calls.

Experience

I've been an active consumer advocate for more than 40 years and have helped hundreds of people win cases against debt collectors as well as helping them defeat demands for summary judgment lodged against them by banks, debt collectors and defeat mortgage foreclosures and keep their homes.

Education/Credentials
Paralegal courses for the most part.
I have been teaching people how to deal with judgments, mortgage foreclosures and other such problems both on and off the internet for many, many years. I am a Richard Cornforth information provider ever since 2000 and worked with many other organizations and causes since 1980. I was Oklahoma State Chairman for the nationwide drive to defeat the Constitutional Convention which was proposed by various factions within our federal government such as the Council of State Governments and the National Organization of State Governors who were working hard to organize a Constitutional Convention to be held in 1995 for the purpose of rewriting our American Constitution to be more acceptable to the United Nations. I worked with Senator Charles Duke of Colorado and Senator Don Rogers of California and many others across the nation to keep them from getting the number of delegate states required to lawfully hold a Con-Con and we were successful. I have worked with many other legislative issues in Oklahoma and have always been very successful.

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