Can debt collectors take money from my checking account?

May 10, 2010

Can debt collectors take money from a checking account
by: Mary

Thanks for submitting your debt collection question on our Q&A page.

Debt collectors who are trying to collect past due credit card debt usually cannot take money from your checking account unless they sue you first, win their lawsuits and get judgments against you. However, in Ohio, workers comp payments are 100% exempt; in other words, debt collectors cannot take that money as payment for a past due debt you owe. That's the good news. The bad news is that if a debt collector does get a judgment against you and then tries to collect on the judgment by seizing the money in your bank account, the bank will freeze ALL of the funds in the account, including your workers comp money, even though it's exempt, and to get access to those particular funds, you'll have to request a hearing. In your hearing request, indicate what portion of the funds in your account are from workers comp. Then when the day of your hearing arrives, bring proof of the source of those funds -- deposit information, for example. Assuming you provide the court with adequate proof, you will regain access to the workers comp money that is in your account.

My best advice if you are behind on your credit card payments and concerned about what debt collectors may do to you is for you to explore your debt management options right away. One of those options is working with a nonprofit credit counseling agency; it may be able to get your credit card companies to agree to let you clear up your past due balances by making smaller payments you can afford in order to clear up your debts.

Another option is contacting a reputable debt negotiation firm to explore the option of settling your debts for less than what you owe on them. Click here if you would like to get a free consultation with a debt negotiation specialist. Also, if you click on the following link, you can find out how the negotiation process works by listening to a debt settlement podcast I did with Michael Bovee, who is the president of Consumer Recovery Network.

Bankruptcy is a third option you may need to consider if neither credit counseling nor debt negotiation is right for you. Go here for a free consultation with a bankruptcy attorney.

Bottomline, I urge you to take control of your financial situation immediately by exploring your debt management options so you can avoid the legal hassles associated with being sued and having the funds in your bank account frozen and your credit histories further damaged by court judgments.

Please share what happens with your situation in the comments section for this question. We are very interested in hearing how this turns out for you.

Can debt collectors take money from my checking account?

Comments for Can debt collectors take money from my checking account?

Comments for
Can debt collectors take money from my checking account?