Articles Posted in Garnishment and Repossession

Garnishment and Repossession are usually the final result of debt collection efforts.  Bankruptcy can stop both actions and we answer how in this category on our blog. Your bank account can be seized, your tax refund offset, your pay check hit for up to 25% – just to name a ways of debt collection. For most garnishments, a lawsuit must happen first. The creditor, or their attorney, or a debt collector files a lawsuit against you for the debt you owe. You are suppose to be served papers so that you have the option to go to court to defend yourself, but for one reason or another, many people don’t actually get the papers they should receive. If this has happened to you, let your attorney know. If the entity suing you wins the case, they receive a Judgment against you. This will allow them to then serve a Writ of Garnishment against you at your place of employment. This instructs your payroll department on how much money to withhold from your check and send to them in order to repay this debt.  Although garnishment and repossession are different, they can both occur in regards to the same debt. Repossession is when the collateral for your loan (such as a car loan, furniture note, etc) is taken back by the creditor of your loan because you have not paid according to the loan agreement. The creditor can then resell the property and if there is money still owed on the debt, sue you for the difference and that can end up being a garnishment of your pay check.

DRA Letter DRA2 LetterWarning – if you have received a letter from DRA (Debt Relief Advocates LLC), it may be a part of the latest scam that preys on seniors suggesting to them that they owe debts that DRA can settle for less.  In most cases – there isn’t even a debt owed at all.

An Ohio case was just settled against them and they are probably sending out these letters to other states as well.  The Ohio lawsuit claimed that the consumer was sent an offer to settle a debt by DRA. But what’s interesting is that the allegation made by the consumer states that they did not owe this debt DRA claimed that they did owe.

DRA violated R.C. §1345.02 and committed an unfair or deceptive act or practice in connection with a consumer transaction because DRA offered debt mediation services when DRA knew that Plaintiff did not owe an debt obligation and Plaintiff had an inability to receive a substantial benefit from DRA’s services.

According to this complaint, the consumer was mailed letters offering to renegotiate a non-existent debt along with many phone calls to her home Continue Reading ›

The Consumer Financial Protection Bureau (CFPB) is a government organization, which accepts and assists with complaints about the following consumer product or service issues:

  • Bank accounts or services
  • Credit cards

If you get served with court papers, you are being sued by someone (person or business entity).  For the sake of this discussion, let’s say you are being sued by a creditor over a debt you did not pay (or they say you did not pay). If you don’t show up for court, the debt collector wins, right or wrong – they win and get a judgment is set against you. With a judgment in place, the debt collector has the power to garnish your wages or seize your bank account, or any bank account with your name on it.

They can sue you and garnish your wages even if they have already repossessed their collateral (such as a car, furniture, guns, etc).  They can sue you and garnish your wages even if they have foreclosed on your home if they say that there is a delinquency (the sale of the home, car, furniture, guns, etc) did not cover the entire balance you owed the creditor.

Don’t avoid being served. The 14th Amendment to the US Constitution mandates “due process” when someone is asserting a claim against a person’s “life, liberty or property.” State Constitutions have also adopted this right and passed what is called “service of process” laws that spell out how a legal document must be delivered to a defendant in a lawsuit.  Don’t make the mistake of thinking that avoiding being served will avoid the consequences of being sued. It is just not true. Avoiding being served does not make the case disappear and avoiding being served could make things worse.

Yes, you can stop debt collectors from calling you. Federal law, the Fair Debt Collection Practices Act, (“FDCPA”) requires debt collectors to stop calling if you send them a written request. Once your written notice for telephone calls to stop has been received by a debt collector, financial penalties of $500 to $1,500 can be awarded per violation.

What You Need To Do To Stop Debt Collection Calls:

    1. Write a letter setting out your name and address.

The Fair Debt Collection Practices Act (FDCPA) prohibits abusive and deceptive collection tactics. This means that the debt collectors cannot insult you, threaten you, trick you, lie to you, or harass you with phone calls at all hours. This law applies only to third-party debt collectors and does not apply to a creditor collecting their own debt.
If you feel you a debt collector is being abusive, you can sue them under the FDCPA. Mississippi has zero consumer protection laws and there is no regulation of debt collectors. Creditors collecting their own debts are free to abuse you in Mississippi. You can complain to the state attorney general’s office if it makes you feel better, but don’t expect anything to come out of it.  But you can stop the calls – click here to find out how. And you have options on how to deal with your debt overall – I can help.

A garnishment is an order from a court that is sent to your employer requiring them to withhold certain amount of money from your paycheck. This money is then sent to the creditor. Mississippi law limits the amount of money that your creditors can take from your wages to 25%. Most creditors are limited to the 25%, but some creditors like the IRS, State Taxes and Child Support are allowed to get more.

What Is The Process For Getting A Garnishment?

1. A creditor must file a lawsuit against you and serve you with a summons telling you to come to court.

In order for a creditor to garnish your wages, they must first file a lawsuit regarding the debt in question and receive a court judgment in their favor (win the lawsuit).  Once this occurs, they will receive an order of garnishment also referred to as a writ of garnishment.  This order is sent to your employer who must hold this writ of garnishment for 30 days.  The reason a 30 day hold requirement was placed into the process is to allow time for the employer and the employee to verify that the order is for the correct person, etc.  The problem is that employers are not required to notify you that they have received an order of garnishment.  They may simply hold it and you will find out 30 days later when your first check is garnished.

It’s important to note that a garnishment is applicable to any money in possession of a third party (ie: your employer, your bank, etc).  It’s not limited to only what you earn.  Wage garnishment is simply the most common form of garnishment.

Garnishment is an option for a creditor for any type of debt that results in a judgment in favor of the creditor.  Lawsuits for breach of contract or to collect debts owed for cars, medical expenses, promissory notes, etc are all applicable.  Even debts relating to taxes and domestic support obligations (child support or alimony) can lead to garnishment.

The federal Fair Credit Reporting Act (FCRA) was created to promote accurate, fair, and private filing of information by consumer reporting agencies.  There are many types of consumer reporting agencies, including credit bureaus and specialty agencies (those that sell information about check writing history, medical records, rental history, etc).  Most familiar to everyone are the 3 national credit bureaus: Experian, Equifax, and TransUnion. Here is a summary of consumer’s major rights under the FCRA:

  1. You must be told if information in your file has been used against you.
  2. You have the right to know what is in your file.

Most of my clients come to me after a garnishment has been sent to their job. A few come to see me as soon as they are served with the lawsuit.  I wish they would come to see me on the day they get sued, but that is not always practical.

If you get sued or served with papers trying to collect a debt there are several things you can do.

1) Ignore everything and hope it goes away.

I have been flooded with inquiries from people in the Jackson, Pearl, Brandon, and Madison cities of the metropolitan area who have been scared to death by collection agencies.  The caller usually claims to be a detective or some sort of officer and states that they are on their way to your house to take you into custody unless you pay your balance in full immediately.  They state they must have the payment over the phone – no option to mail in a payment, etc.  This is all a ruse to gain entry into your bank accounts.
People, listen up. YOU DO NOT GO TO JAIL FOR FAILURE TO PAY AN ORDINARY DEBT.  Don’t be scared by these tactics. It’s simply lies to get you to hand over money.  Do not give them any details about yourself.  They may have some info about you and even the name of a company you owe, etc but even if you are indebted to the company, it is illegal for bill collectors and collection agencies to threaten you with possible arrest. You can go to jail for not paying child support or court fines but not for regular and ordinary debts.

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