Expert: Creditwrench - 11/6/2009

Question
QUESTION:  I am a life long resident of Southern, CA. In early 2004 I was hospitalized for a prolonged time period, lost my place of residence as well as my belongings and ended up living in a board and care facility.  I was also deemed to be permanently disabled and placed on SSI. During the time I was in the hospital, they sent a legal financial representative to speak with me.  He asked me about any debts I might have etc. He told me not to worry, unless I heard anything further, that the debts would be taken care of, charged off. I filed a change of address form with the post office, while still in the hospital and had all my mail forwarded to a post office box that I have had for over 10 years. This is the same post office box that my checks are imprinted with, the same checks that I have always used to pay all my debts. Imagine my shock and horror when on Oct. 28th 2009 I found that this same checking account had been emptied out except for $1.00 the result of a levy from a credit card company. Of course this levy caused a cascade affect of bounced checks and fees. I had no idea what was going on! I was finally able to find out that ENTIRELY without my knowledge from Sept. 2004 thru Feb. 2005 I had apparently been taken to court, sued, and had a Default Judgement entered against me.  Then the credit card company chose to sit on the judgement until Sept. 2009 before returning to court and under the case type: Collections (Limited Jurisdiction) having apx. $3330. in interest added on to the judgement, using a Writ of Execution and again without my knowledge. It was only after they had this interest added on that they chose to levy the same checking account that they had knowledge of the entire time. The same one that had an address on it that they could have used at any time to contact me.  How can this company lawfully take me to court repeatedly and obtain a judgement WITHOUT ever contacting me? How is it then lawful for them to wait almost 5 years before filing a levy against an account they have always known about? The bank has told me that I have 21 days to prevent them from obtaining my money now being held for the levy judgement. The bank was served on Oct. 21st so there is little time left. Since the amount they obtained was far less then the over $10,000.00 they were after does that mean they can continually have more interest added on?  Can they just keep getting another levy each month? Are they able to go after any real property that I may have as well as my bank account?  Will I ever be able to have money in a bank account again without worrying? Better yet do you have any suggestions in solving this matter? I live FAR below the poverty line and the only money I have is from a much cut SSI check so there is absolutely no way to pay off their judgement. Would it help if I declared bankruptcy? Not that I have the funds to do so. I am trying to locate a free legal aid service that doesn't require a lengthy drive or a long wait in line, because of my health but I haven't been able to locate one near Long Beach, CA. Also do you know of any ways to make sure there are no further unknown judgements out there? How can anyone justify an apparent law that allows a person's bank account to be emptied of everything but $1.00? This levy took rent, medicine and food money from me as well as adversely affecting my health.  I guess no one cares any more about anyone as long as they get what they consider to be their fair share. Thank you for taking the time and effort to read this and for any advise you may have.

ANSWER: As much as it might surprise you to have me say so I surely do wish that had happened to me. Here is why. It is illegal for them to even threaten to take SSI pension money, much less do it. Since it is illegal under federal law they also violated the CA Rosenthal Act so I'd get to sue them twice. Once at the state level and once at the federal level and I wouldn't even need a lawyer to do it. I'd get my court costs and attorney fees, my money back, the judgment vacated and damages on top of that. I'd make them take it off my credit reports too and pay all those bank fees I was charged for the bounced checks they caused me and any other hardships as well. You can do the same and you don't even need a lawyer to do it. All you have to do is learn how to prepare your papers and file them and that is what I do. I teach people how to win in court without lawyers. It isn't hard at all. I'm sorry that happened to you as it has to lots of elderly people. It causes them a real hardship indeed.

---------- FOLLOW-UP ----------

QUESTION: Thank you, CreditWrench, for your prompt and hopeful reply.  I have felt like a ping-pong ball with everything that's been going on. A legal aid office that I managed to get through to on the phone told me they don't handle this sort of "civil thing" and gave a consumer credit number to call. The man who answered that number told me to call legal aid and when I explained that they had told me to call him said, "he thought what had happened to me was illegal  he wasn't sure and could I call him back when I got the matter settled to let him know if it was legal or not."  I just want to clarify a few things from my question and your answer.  I am in my early 50's and the SSI I receive is Supplemental Security Income for the disabled. While I get it monthly via Social Security I don't believe it is considered a pension because it is contingent on a person being poor and disabled.  I have been told by a Social Security Representative that while no one can attach my SSI funds through Social Security once they are in the bank the funds are considered "fair game." The representatives have given me wrong advice or incomplete advice before and I am hoping they are wrong this time. Also the credit company that emptied my account never contacted me about anything they just acted like vultures and emptied my account that contained my SSI money.  Can they claim they did not know it was from SSI? I know laws vary state to state does the fact that I live in California change anything? If the monies are indeed protected under federal law, what specific federal laws could you suggest that I investigate? I am hoping that nothing in this follow up question changes your reply to my original inquiry. My health continues to be quite adversely affected and I am literally living hand to mouth since being left destitute in one vulture swoop. I am interested in finding out how to prepare and file papers against these "people" but I am worried about the costs and time. Are there any statutes of limitations on filing times?  Where would I file them?  Thanks to California budget cuts the courts here are closed or considerably backed up.  Again thank you for your time, effort and any further advice you may have.

Answer
Social Security laws state that penison money cannot be garnished but has no penalties for those who wrongfully grab pension money from banks. On the other hand FDCPA makes it a violation to take action that cannot legally be taken or to threaten to take action that cannot legally be taken. Many debt collectors take the stance that the law which says they cannot garnish SSI money to mean that they cannot garnish the Socail Security offices directly but once the money hits a bank it is fair game. That flies directly in the face of the purpose of SSI which is to ensure that the elderly and the disabled are not to be allowed to go hungry nor without medical attention. So the only viable remedy when someone's SSI is garnished at their bank is to file a federal lawsuit under FDCPA. Yes, the same action could be taken under the California Rosenthal act but as you say, the California state courts are in a budget crises and you may or may not get heard. On the other hand, they violated both state and federal law so it might be possible to file a case at both the federal and state levels. That might be possible and on the other hand both suits might very well be consolidated into one at the federal level. If you filed at both levels and the state court ruled first and ruled against you then they might be able to claim that the matter had already been decided at the local level and therefore could not be heard at the federal level. For that and other reasons I recommend that any such lawsuit be filed at the federal level. Another nice part about it is that you won't even need to hire a lawyer to do it for you but on the other hand if you happen to live in Orange County I might recommend that you look up Mr. Robert Hyde who is an excellent consumer advocacy attorney in San Diego. If you don't live in Orange county he won't be able to help you since he don't usually go anywhere else to take cases. The only problem that I am aware of is that you would have to learn how to file without an attorney and that really isn't all that hard to do. Just takes a bit of time to do is all. Since you are on SSI and disabled you wouldn't even have to pay court costs. Quite frankly, I think winning and not only getting your money back but also end up with a nice damages award.