Expert: Regan Shinski - 10/21/2010

Question
QUESTION: You gave me some information to my previous question, and that was very very helpful.

What is an online debit bank, as it sounds like that is one semi protected way to hold cash?

If they get the judgement and enforce on my bank, then is that just a one time hit.  If someone deposits money in their a month later, and if I get it out right away, is that safe?  Or do they order the back to hand over any future deposits?

They did not serve me.  I was not doging, but they claim to have served me at an address I no longer live at.  They filed a bogus proof of service.  Maybe their process server lied.  Sometimes process servers will just serve anyone they see.

Can I use this against them?

It does seem wrong that they can find our bank accounts so easily.

Thanks

ANSWER: I do not believe the online funds are necessarily protected.  I think they still have to obtain personal information such as SSN, address, etc.  These are the ways the funds could be tracked.  If the bank is not FDIC insured, you are also at more of a risk due to the stability of the bank but safer from collection.  The advantage is that some of them MAY - I mean MAY - be a LITTLE more off the grid.  Even accounts like paypal.com and accountnow.com fit into this mold.  It really comes down to the creditor.  If this is some small collection agency 3,000 miles away, they may not pursue a strategy of chasing you all over the place for $150.  If it's the IRS trying to collect $150,000, it's a different ball game - you know what I'm trying to say?

The funds could be taken in a one-time attack or through a freeze.  That depends on the bank, state, and law enforcement procedures in your area.  I have seen it both ways.  They can't order you to hand over future deposits, it's once the deposit is made it's at risk.

The issue of serving is a big one.  I hate to say, this also really depends on your area.  State laws usually govern these things.  What you would do is go to the court and look at the actual case documents.  Find out exactly how you were served.  Some states do not need to have a process server do it physically.  You can then file a motion to vacate the judgement based on improper servicing.  This is essentially a re-trial, so if the creditor is on the ball and shows up with evidence, you may lose again.  However, some people go very aggressive like this and file motion after motion and eventually hope the creditor fails to show or you win a case.

Good luck, I hope this helps.  Judgements are not easy to deal with once they are in place.  You should consider settling or fighting before it's granted against you.

Regan

We Fight, Your CREDIT Wins -- WWW.FICOFIGHTER.COM

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

QUESTION: I have read about this attorney collector in their web page.  They brag about having all the latest software and using all the best data bases.  I did not realize we were also so vulnerable to that, that our privacy was so compromised.

I have read that shady collectors will do impersonations to find out account balances and decide when best to serve their order.  So do they just take my balance or do they freeze it?

Then after that, what is someone else makes a small deposit, like as a gift to me?  This is my current concern.

I withdrew some money and it went into my pocket.  Tonight it gets buried, literally.  The rest will follow.

As far as fighting the judgement, I really cannot.  The only options are

1. pay them, which I cannot at this time

2. Bankruptcy, which may be later

3. Or just because of their service shenanigans get them penalized for that.



Thanks

ANSWER: Hi Paul:

Again, the issue of freezing versus just taking really is a state and bank policy issue.  I have seen both.  I would simply ask your bank these questions, especially if the judgement is not in place yet.  Just say, what is your policy or what can the creditor do if they have a judgement in place.  Maybe the bank has a way to protect the funds as well.

The issue of a gift deposit doesn't matter.  They take the balance.  The only exception is for accounts that ONLY handle protected income such as social security, disability and pensions.

You are basically correct on your options.  I would add a fourth option of settling.  Not saying I recommend it or don't recommend it but it is an option to work out a payment schedule.  If you enter into a new agreement and you adhere to this agreement, they cannot take your funds.  At least they cannot take your funds without major repercussions from you.  Try to get it specifically in the agreement that no garnishment or bank attacks will occur.

You should also consider credit repair.  Credit repair not only starts improving your credit immediately but (more importantly in your case) starts the foundation and builds evidence of federal and state law violations.  These violations support future litigation, removal of the derogatory information, and OFFSET the actual debt.  Consider www.ficofighter.com at some point.  You really would benefit from this process.

Good luck though in whatever direction you go.  I would definitely talk to the bank about their policies on freezes.

Thanks,
Regan

We Fight, Your CREDIT Wins -- WWW.FICOFIGHTER.COM

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

QUESTION: Settling is not an option for me now, or I would have done it.  Or probably I would never have gone into default.

Like I said, this is a total collapse.

As far as their service shenanegans, I am outraged.  But even if I tried to penalize them now, it would just at best be a delay.  If I could get them penalized later on, that might be something.  But the real sanction against them should be against this law firm, not just pertaining to my case.

As far as my bank account, I guess at this point all I want to know is should I close it, or keep it open.

Someone might want to give me something.  So if this creditor strikes, is it a one time hit.  Or do they get all future deposits?

If it is the later, then there is no reason for me to keep it open, to keep one penny in it, or to be dealing with banks in any  way at this time.

If there is some lattitude, then I would like to keep it open as a bank account has practical utility.

I will talk to the bank as you suggested.  Your answers have been very helpful.  I am horrified at how unprivate our banking is.

If you can say something about whether or not I should be planning on keeping the account open, or whether it would just become useless, it would further help me.

Paul

Answer
Unless the bank can give you assurances that the funds are safe, I would not put money into the account that you are counting on keeping.

However, I would NOT close the account immediately unless you are paying a decent monthly fee to keep it open.  I say this for two reasons:

First, they can't take money from you until the judgement is in place.  If I remember correctly, you said that hasn't happened.

Secondly, you may run into some difficulty opening another account down the line because of the credit/judgement issue.  Again, these laws vary by state but banks are getting more and more stringent on opening accounts to people with poor credit and especially those with previously closed accounts (not you I know, just saying.#

So, unless the bank gives you those assurances and if it doesn't cost you too much, I would keep the account open with MINIMUM funds #$5?)  Funds that you don't care too much if they take.

Otherwise, I would close it.

Good luck,
Regan