You might receive letters requesting payment if you are being sued by a creditor or creditors for a debt you are unable to pay. The creditor may finally get a judgment. It can be frightening not knowing what could or can happen next. As a debt relief attorney in New Jersey, I can assist you in comprehending the procedure and figuring out what steps you should take to keep creditors from finding and seizing your bank account.
Are you worried about a judgment creditor finding your bank accounts? You’re not alone. Many people are concerned about this, especially if they’re struggling with debt. The good news is that there are ways to protect your assets, and this guide will help you understand how.
First let’s define what a judgment creditor is. A judgment creditor is a person or entity that has a court judgment against you for a debt you owe. This could be a credit card company a medical provider, or even a former friend or family member. Once a judgment is entered against you, the creditor has the legal right to collect the debt, and they can use various methods to do so.
One of the most common methods is to garnish your wages. This means that the creditor can take a portion of your paycheck each pay period until the debt is paid off. However, there are limits on how much a creditor can garnish, and there are exemptions for certain types of income, such as Social Security and child support.
Another method that creditors can use is to levy your bank account. This means that the creditor can freeze your account and take the funds to satisfy the debt. However, there are also limits on how much a creditor can levy, and there are exemptions for certain types of accounts, such as those used to receive Social Security or child support.
So, how do judgment creditors find your bank accounts? There are a few ways:
- Credit and loan applications: When you apply for credit cards, car loans, bank loans, or other types of loans or credit, you have to fill out an application. On that application, you often must provide bank account information, the name and address of your employer, and information about your assets. If that information hasn’t changed, the creditor will know where to send a wage garnishment order, what bank to contact to attach funds in your bank account, and whether you own a home.
- Your last payment to the creditor: Smart judgment creditors keep information from your last payment. If you paid by check, the creditor will know what bank you use and what your account number is.
- Information about your real estate: It’s fairly easy for judgment creditors to find information about real estate you own, especially if the property is in a county near where you live. Real estate records are available to the public, and often searchable online.
- Information about cars and boats: In many states, if the creditor has a judgment against you, the Department of Motor Vehicles will provide it with information about your registered vehicles. Although, the creditor might have to pay a fee. Also, if liens are filed against your personal property, such as a boat, those liens are often recorded with the Secretary of State or sometimes with the county, and are usually public record.
- The debtor’s examination: Once it has a judgment, a creditor may serve you with notice of a debtor’s examination. The notice will order you to appear at a specific place at a certain time and testify, under oath, about your assets. If you don’t show up, the court could hold you in contempt of court and issue a warrant for your arrest. A creditor that’s serious about collecting from you can hold a debtor’s examination and question you about all sorts of assets and income that you might have.
Now that you know how judgment creditors find your bank accounts, what can you do to protect yourself? Here are a few tips:
- Keep your bank account information private. Don’t share it with anyone you don’t trust.
- Consider opening a new bank account at a different bank. This will make it more difficult for creditors to find your money.
- Be careful about who you write checks to. If you write a check to a creditor, they will have your bank account information.
- Pay your debts on time. This will help you avoid judgments in the first place.
- Talk to an attorney. An attorney can help you understand your rights and options, and they can help you develop a plan to protect your assets.
It’s important to remember that you have rights as a debtor. You should not be afraid to fight back against creditors who are trying to take advantage of you. By following the tips above, you can protect your bank accounts and your other assets from being seized by creditors.
If you are facing a judgment creditor, don’t wait to take action. Contact an attorney today to learn more about your options.
Here are some additional resources that you may find helpful:
- Nolo: https://www.nolo.com/legal-encyclopedia/how-do-judgment-creditors-find-your-property.html
- Richardson Law Offices: https://www.richardsonlawoffices.com/faqs/how-do-creditors-find-your-bank-accounts.cfm
- National Consumer Law Center: https://www.nclc.org/
Ways Creditors Can Find Bank Accounts
Just because a creditor sues you and gets a judgment doesnt mean they know where your stuff is. They still have to find it to collect the debt, absent any payment from you. In my experience, there are two ways in which they can find out where you bank.
- Previous records of payments. Have you paid any money to a law firm or collection agency? Before depositing the checks, they might have copied them. This indicates that they are in possession of your account’s routing and account numbers. Having worked with creditors in the past, I used to advise them to photocopy checks as soon as they arrived, just in case you needed the details.
- You told them where the accounts were. You may have told the creditors about your accounts. If you were aware of it, you would be able to anticipate the levy or recognize the need for action. They sent you a document known as an Information Subpoena requiring you to make full financial disclosure of assets, liabilities, and income sources, so how did you tell them? To put it simply, they made you reveal to them where your money was!
So What Do I Do?
You are probably safe for the time being as long as you haven’t responded to their information subpoena if you haven’t made payments to this creditor, its collection agents, or lawyers in a long time or if you have changed banks since you did.
But this does not mean that you should do nothing. It won’t be long before they take action, even if it’s just to record the judgment as a lien against your house, provided you own it. They’ll take action; one day you’ll wake up with no money in the bank or facing an impending wage garnishment, and by then it might be too late. You need to take action now!.
It’s one thing to decide to pay the creditor; it’s another to pick up the phone and make the payment arrangements (and sometimes even more difficult to do it successfully)! My extensive experience as a creditor has allowed me to assist many in creating an affordable payment plan with attorneys for creditors.
If you are being sued for a debt over $10,000, live in New Jersey, know you need to make payment arrangements with a creditor and are ready to take action, just click this link to schedule a call with me to discuss your case!
Please download my free book, The Biggest Secrets Your Creditors Don’t Want You to Know, if you would like more information about how creditors use the legal system to collect debt. Knowledge is power.
However, if this debt is not the only one you have and you are unsure if filing for bankruptcy will be the best course of action, feel free to download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File for Bankruptcy in New Jersey. You could also just give me a call and come in to discuss it further!.
You can also take the quiz to the right to determine if bankruptcy is the right solution.
Debt Collectors and Your Bank Account
FAQ
How do collectors find bank accounts?
How do creditors seize bank accounts?
What states protect bank accounts from creditors?
How does a creditor find you?
Can a creditor find your bank account?
It is essential to be aware of this fact and understand that creditors have legal means to access this information. Creditors have several methods to find your bank accounts to collect outstanding debts. These methods include accessing public records, skip-tracing techniques, and obtaining court judgments.
How does a debt collector find a bank account?
Debt collectors take certain actions to find checking and savings accounts in your name. When creditors and lenders try to locate bank accounts, they’ll utilize: With these resources, creditors can track down bank accounts with relative ease, so it’s important to be aware of what information creditors can access.
What does a creditor look for in a bank statement?
High on the list of property the creditor looks for are deposit accounts (like savings, checking, certificate of deposit, and money market), tax refunds due, and other easy cash. Don’t lie. Your statements are ordinarily given under penalty of perjury.
What happens when a creditor knows where you bank?
Once the creditor knows where you bank, it can send a copy of the court judgment, along with a writ of garnishment, to the bank. The bank will then freeze the appropriate accounts. Unless you previously paid the creditor using only cash or money orders, the creditor probably already has a record of where you bank.