Judgement and Bank Account Seizures in North Carolina

Many families in America are having money troubles because of COVID-19. Some might have their wages taken or bank accounts frozen by people they owe money to. This can happen when a court says they must repay a debt. In some states, this was paused during COVID-19, but it might start happening again soon. Let’s look at how people can protect their money and what they can do if this happens.

Wage Garnishment: When Someone Takes Part of Your Paycheck

When you owe money, sometimes the person you owe can take part of your paycheck. This is called wage garnishment. The good news is that there are rules about how much they can take.

Federal Law Protects Some of Your Wages

The government says that debt collectors can’t take all of your paycheck. They have to leave you with either:

75% of your pay, or
30 times the minimum wage ($217.50 per week)

Whichever amount is more significant, you get to keep it. The rest can be taken to pay the debt.

Some States Protect Even More of Your Wages

Many states have rules that protect more of your wages than the federal law. For example:

In California, you get to keep at least $480 per week.
In New York, you keep at least $450 per week.
All your wages are protected in some states, like North Carolina and Texas.

Knowing your state’s rules is essential because they might help you save more money.

What to Do If Your Wages Are Being Garnished?

Check if the amount taken is correct. Make sure it follows your state’s rules.
Look out for multiple garnishments. If more than one debt collector takes money, ensure they don’t take too much together.
Make sure enough taxes are taken out of your paycheck. If not, you might owe more taxes later.
If you’re paying child support, taking it directly from your paycheck might be better. This can protect you from other debt collectors taking too much.

Bank Account Garnishment: When Someone Takes Money from Your Bank?

Debt collectors can also try to take money directly from your bank account. This can be scary because it can happen without warning. But there are ways to protect your money.

Protecting Your Bank Account:

Know What Money is Protected

Some types of money are protected even after entering your bank account. These include:

Social Security benefits
Veterans benefits
Some wages (in some states)

Use Direct Express for Social Security and Veterans Benefits

If you get Social Security or Veterans benefits, you can put them on a Direct Express card instead of a bank account. This money is protected from debt collectors.

Open a Separate Account for Protected Money

If you have money debt collectors can’t take, put it in a separate bank account. This makes it easier to prove that the money is protected.

Check Your State’s Rules

Some states protect a certain amount of money in your bank account, no matter where it came from. For example:

In New York, $2,664 to $3,600 is protected.
In California, $1,788 is protected.
In Delaware, debt collectors can’t take money from bank accounts.

What to Do If Your Bank Account is Frozen?

If a debt collector freezes your bank account:

Act quickly. You usually have a short time to claim that your money is protected.
Check where the money came from. Tell the court if it’s from Social Security or wages protected in your state.
Get help from a lawyer if you can. They can help you prove your money is protected.

Special Rules for Student Loans

If you owe money on student loans, the rules are a bit different:

The government can take up to 15% of your wages without going to court first.
They have to leave you with at least $217.50 per week.
You can ask them not to take your wages if it would cause you financial hardship.
If you start repaying your loans, they might stop taking your wages.

Protecting Your Money: Tips and Tricks:

Here are some ways to keep your money safe from debt collectors:

Use a Prepaid Card

Put some of your money on a prepaid card. Debt collectors are less likely to find and take this money.

Get Paper Checks Instead of Direct Deposit

If you’re worried about your bank account being frozen, you can ask for paper checks instead of direct deposit. Just be careful not to lose them!

Open a Bank Account in Another State

Some states make it harder for debt collectors to take money from bank accounts. You might be able to open an account in one of these states.

Use a Business Bank Account

Keeping money in a business account can sometimes protect it from personal debts if you own a business.

Consider an Offshore Bank Account

This is complicated and expensive, but it can make it hard for debt collectors to reach your money.

Remember: Don’t Try to Hide Your Money

It’s important to know that trying to hide your money from debt collectors can get you in trouble. If you lie about where your money is, you could be punished by the court. Instead, focus on legal ways to protect your money.

Getting Help

Dealing with debt collectors can be scary and confusing. If you’re having trouble:

Talk to a lawyer who knows about debt collection laws. Many offer free consultations.
Contact a credit counseling agency. They can help you make a plan to deal with your debts.
Learn about your rights. The Consumer Financial Protection Bureau (CFPB) has information about debt collection laws.

Remember, you have rights even when you owe money. Debt collectors have to follow rules about how they can collect debts. If they break, you can report these rules to the CFPB or your state’s attorney general.

Conclusion:

Protecting your money from debt collectors isn’t always easy, but it’s possible. Know your rights, understand the rules in your state, and don’t be afraid to ask for help. With the correct information and actions, you can keep more of your hard-earned money and work towards a better financial future.