If you have received money from personal injury settlement, and now you are feeling worried that you are going to lose it, because you are fighting a previous credit card debt in court, then you have every reason to worry. If you lose the case or never bother to show up in court, court can take strict against you. There’s every chance that the court will empower the creditors to garnish your wages or levy your assets in the bank in order to retrieve the debt amount. If you like to protect your assets including you accident settlement proceeds from being garnished directly from your account via a bank levy, you have to adopt some preventive measures. Read ahead, to know more in this regard. Keep in mind there is no guarantee that you will be able to protect your assets from credit card debt judgments, therefore, its best to go for credit card consolidation and stop creditors from filing a case, before things get really dicey.
Your first and foremost duty is to read through your state laws thoroughly. This is because not all states authorize creditors to access consumer bank accounts, not even after a successful court judgment. Therefore, you need to check it from the state attorney general’s office, whether or not your state permits creditors to garnish your bank accounts after a lawsuit.
Your next step should be calculating the risk of a bank account garnishment. Actually, the creditors need to know your bank’s name before beginning the garnishing procedure. If you have been sued over an old credit card debt, chances are it was handed over to a collection agency long ago. Now, if it’s an old debt think hard, whether or not you have ever made a payment to the collection agency. If you find out that you have sent payment to the collection agent either by a bank draft or personal check, it means eventually your creditors will figure out where you bank is located and soon will serve the bank with a writ of execution to levy your accounts.
Under these circumstances, consider negotiating for a repayment plan with your creditors. If you can convince your creditors to agree upon a monthly or quarterly repayment plan and if you are willing to contribute regular payments towards the judgment debt, you can prevent the creditor from taking the funds by force or by garnishing your bank account.
Your next step should be checking out whether or not IRAs are exempt from garnishment in your state. Actually, since an IRA is considered an individual retirement account, some states do not allow the judgment creditors to garnish funds from an individual’s retirement funds. If you are lucky enough and find out IRAs is exempt from garnishment in your state, you may safely keep your personal injury settlement money into one of these retirement funds.
One more option is you can liquidate the funds from your bank account. Actually your judgment creditor can only pull the money directly from your bank account, but if you liquidate the bank account into cash form and keep it at home, you can prevent garnishment. This is because the creditors are not permitted to come to your home and seize your money.
Last but not the least, you can reopen your case and contest the original judgment by filing a motion to vacate. In fact you can overturn the judgment–and garnishment order, provided you can prove that you were not properly notified of the original lawsuit or that the judgment was levied in error.
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