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Where to Send Paycheck Prior to Getting Sued?


Runnin
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Thanks to the members of Creditboards for letting me join...I'm hoping someone can tell me where I should be depositing my paycheck in advance of an expected lawsuit/judgement. Basically, I'm going to be sued for a large amount and I know I don't have a leg to stand on. I want to get out ahead of it and learn where to send my direct deposit so that it can't be frozen. I live in a non-garnishment state, so I know garnishment isn't an option. But they CAN freeze any bank account. Is there a way to send my pay to a prepaid debit card or something without my name on it? I don't know if getting a paper check will be an option for me. 

 

Thanks in advance and I look forward to using this resource a ton in the coming months!

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From experience when I did payroll for three dealerships, we required direct deposit with absolutely no exceptions. There were always some people who simply did not trust banks or just could not establish a bank account for checking.  I just had them go to a store and buy a debit card that they could load money on to.   Payroll simply did an ACH overnight to their debit card.   '

 

I don't know the particulars about whose name was on the debit card and all, I just got the account numbers for the transmittal.

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Your payroll options will rest with your employer.  I would suggest asking your HR person.  You don't need to tell them anything about pending litigation.  Just indicate that you were looking at changing banks and wanted to know if they can do a paper check. 

 

The size of your business will be the primary driver here. 

 

You ALSO need to realize that there is often a sizeable gap between being served and when the gavel bangs awarding judgment to the Plaintiff.  There are plenty of opportunities to settle in the interim.  And while pre-judgment attachment/levy actions CAN occur in some jurisdictions, it is usually not something that is going to happen on consumer debt. 

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Thanks so much everyone for the information. I was under the impression that if my name was on an account (regardless if someone else's was on it), then it could be frozen/levied. I don't make much money and I can't afford an attorney so my guess is, they'll obtain a default judgement once this comes down the pipe. I wonder if a prepaid debit card is an option if I can't get a paper check? 🤔

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2 hours ago, Runnin said:

Thanks so much everyone for the information. I was under the impression that if my name was on an account (regardless if someone else's was on it), then it could be frozen/levied. I don't make much money and I can't afford an attorney so my guess is, they'll obtain a default judgement once this comes down the pipe. I wonder if a prepaid debit card is an option if I can't get a paper check? 🤔

You need not have counsel to be able to 1) file a Respondent's Original Answer or 2) enter into negotiations with a Plaintiff. 

 

The only people getting defaults should be those who simply play ostrich and do nothing after being sued. 

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3 hours ago, Runnin said:

Thanks so much everyone for the information. I was under the impression that if my name was on an account (regardless if someone else's was on it), then it could be frozen/levied. I don't make much money and I can't afford an attorney so my guess is, they'll obtain a default judgement once this comes down the pipe. I wonder if a prepaid debit card is an option if I can't get a paper check? 🤔

 

Read the packaging very carefully. Make sure it specifically mentions that you can set up direct deposit on it.

 

Make sure you get something with no ATM fees.

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3 hours ago, Runnin said:

Thanks so much everyone for the information. I was under the impression that if my name was on an account (regardless if someone else's was on it), then it could be frozen/levied. I don't make much money and I can't afford an attorney so my guess is, they'll obtain a default judgement once this comes down the pipe. I wonder if a prepaid debit card is an option if I can't get a paper check? 🤔

 

You are correct in that if it is a joint account they can attach it for the debt via bank levy.  Worse the person on the account with you can have their assets in the account frozen while they seek to undo it and prove their money is not attachable.  If you choose the best prepaid debit card that isn't fee based or with a lot of restrictions you can have your paycheck sent to that.  When you open one of those accounts you do have to give a SS#.  While they are not nearly as easy to find as a bank account they are not invisible.  What this won't prevent is them doing a debtor's exam.  You have to respond to that because failure to do so can result in an arrest warrant for failure to appear and answer.  That means you would have to disclose the debit card you have your wages sent to.  Whether you could get your paycheck switched to another account after the debtor's exam and before they send levy paperwork to the debit card entity is another potential hurdle.  

 

One thing that has not been mentioned so far:  bankruptcy.  If this debt is large enough you might want to do a consult with a couple of BK attorneys.  Most do an initial one for little or no cost.  It could be a lot less stress to simply file and wipe this out depending on the rest of your financial picture and if the debt is eligible to be discharged in BK.  

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This will not work. If they get a judgment, they will proceed to a debtor's exam, in which you will have to reveal your employment status. Failure to do so will result in a contempt of court citation and more problems. They will file a garnishment with your employer; the money will be deducted from your paycheck before it is even deposited. You get the remains. You can find a bank on the moon; it won't help. They already thought of this decades ago.

 

Give us the details about the debt; who it is, rough amount, when you defaulted. Often there are ways to make a creditor give up. 

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2 hours ago, legaleagle2012 said:

This will not work. If they get a judgment, they will proceed to a debtor's exam, in which you will have to reveal your employment status. Failure to do so will result in a contempt of court citation and more problems. They will file a garnishment with your employer; the money will be deducted from your paycheck before it is even deposited. You get the remains. You can find a bank on the moon; it won't help. They already thought of this decades ago.

 

Give us the details about the debt; who it is, rough amount, when you defaulted. Often there are ways to make a creditor give up. 

Unless I missed it, OP did not indicate what jurisdiction they are in...a 'debtors exam' is NOT something which exists in all States.  Further, garnishment is not an option in all States.  You, of all people dispensing advice, SHOULD be aware of this reality.

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Let's understand the realities here- debt collectors are not stupid but they are lazy. You can use that to your advantage. When I was a debt collector and was working old accounts where the company I worked for had a Judgment I would look for bank accounts at banks and credit unions close to the debtor's residence and place of employment. Sometimes I would "shotgun" a Subpoena Duces Tecum to every bank that was near the debtor's home or place of employment. In New York City, sending a Subpoena Duces Tecum to EVERY bank was both time consuming and expensive, so a line had to be drawn somewhere. That, my friend, is your key - if your employer requires you to have a Direct Deposit, you can do it - but at a bank far away from where you live or work. Do a Google Search for "Internet Banks" and look at those in States far away from where you are.  Also, the smaller and more obscure the bank, the better. Here are some of my favorites (Full Disclosure: I have used both of them when I was in your situation):

 

https://redneck.bank/

 

https://www.kabbage.com/

 

The rules are simple - small bank far away from you, FDIC insurance on the bank account. Both of these meet all those tests.

 

 

Edited by Flyingifr
Add information, correct spelling
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4 hours ago, Flyingifr said:

Let's understand the realities here- debt collectors are not stupid but they are lazy. You can use that to your advantage. When I was a debt collector and was working old accounts where the company I worked for had a Judgment I would look for bank accounts at banks and credit unions close to the debtor's residence and place of employment. Sometimes I would "shotgun" a Subpoena Duces Tecum to every bank that was near the debtor's home or place of employment. In New York City, sending a Subpoena Duces Tecum to EVERY bank was both time consuming and expensive, so a line had to be drawn somewhere. That, my friend, is your key - if your employer requires you to have a Direct Deposit, you can do it - but at a bank far away from where you live or work. Do a Google Search for "Internet Banks" and look at those in States far away from where you are.  Also, the smaller and more obscure the bank, the better. Here are some of my favorites (Full Disclosure: I have used both of them when I was in your situation):

 

https://redneck.bank/

 

https://www.kabbage.com/

 

The rules are simple - small bank far away from you, FDIC insurance on the bank account. Both of these meet all those tests.

 

 

I have always been of the assumption that opening up a new checking account anywhere would be auto traced via SSN. Especially government debt i.e. welfare, 

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6 hours ago, MarvBear said:

ummmmmmmmmmm   the Original Poster did post the above.  I would assume they have done enough research to verify.

 

THIS^^^^^^^^^^^^  I based my answer on the OPs statement that wage garnishment was not possible in their state therefore they needed to only make the move to protect the funds once issued as a paycheck.

 

3 hours ago, StarkRaven$ said:

I have always been of the assumption that opening up a new checking account anywhere would be auto traced via SSN. Especially government debt i.e. welfare, 

 

In this digital era I wouldn't assume it happens but definitely have a plan for that situation for sure.

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Worst case scenario, you could direct deposit the money into an account that does not have your name on it, such as a spouse or trusted family member. If you don't make too much money, it probably won't cause any issues for them. The they could give you cash or a debit card for that account. But I am with centex, you haven't lost the case yet. You should file an answer. There are resources online that will show you how to do it and what your defenses are. I would also look closely at the papers they served you and the court records. Even if you know the debt is yours, they still have to prove they it is your debt, they own the debt, and that they have a right to collect it. If they can't prove any of those elements, it is worth fighting. Debt collectors are a**holes who profit off of peoples' pain and suffering. Why not make their lives just a little bit more difficult, rather than giving up?

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7 hours ago, StarkRaven$ said:

I have always been of the assumption that opening up a new checking account anywhere would be auto traced via SSN. Especially government debt i.e. welfare, 

Not necessarily. Once again, they most likely will not be checking the banking CRA's, like Chexsystems, they may be checking the debt CRA's but they will not learn much there they don't already know. There is no Governmental list they can check.

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We still need to know what state we are talking about. For instance, does this state allow for debtor's exams? If so, a common question is to ask where you have bank accounts. Does the state allow for a bank levy? I've never heard of one that doesn't. Judges frown upon constantly changing banks to avoid a legitemate judgment, although the burden is on the Plaintiff to find your money. It usually costs money to file all this paperwork for a levy, pay a sherriff, etc. Also noteworthy is that the bank charges a rather nice fee for processing this for you if a Sherriff shows up; the bank gets their fee first. If there isn't enough in the account to pay that fee, the Sheriff gets nothing.  One method that seems to work is to simply be at the bank a few minutes after the deposit occurs, and withdraw the funds. How long this will work or what can be done about it is another question. I'm not fully up to speed on this, although I did thwart one collector by making sure there was never anything to collect.

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1 hour ago, legaleagle2012 said:

We still need to know what state we are talking about. For instance, does this state allow for debtor's exams? If so, a common question is to ask where you have bank accounts. Does the state allow for a bank levy? I've never heard of one that doesn't. Judges frown upon constantly changing banks to avoid a legitemate judgment, although the burden is on the Plaintiff to find your money. It usually costs money to file all this paperwork for a levy, pay a sherriff, etc. Also noteworthy is that the bank charges a rather nice fee for processing this for you if a Sherriff shows up; the bank gets their fee first. If there isn't enough in the account to pay that fee, the Sheriff gets nothing.  One method that seems to work is to simply be at the bank a few minutes after the deposit occurs, and withdraw the funds. How long this will work or what can be done about it is another question. I'm not fully up to speed on this, although I did thwart one collector by making sure there was never anything to collect.

There is no reason to be afraid of a  Debtor's Exam. Yes, you are required to tell the truth, but remember - today's truth can be tomorrow's ancient history. So, the Debtor's Exam is on a Tuesday - and the creditor's attorney asks you where you bank. You truthfully respond "ABC Bank". The creditor's attorney is not a  Judge so he/she has no power to issue a Court Order to you forbidding closing that account.  On Wednesday morning you close your account at ABC Bank and open one at DEF bank. In the off chance you are ordered not to close the ABC bank account, you simply open an account at DEF bank and leave $1 in ABC. You can move your money a lot faster than they can attach it.

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13 hours ago, Flyingifr said:

There is no reason to be afraid of a  Debtor's Exam. Yes, you are required to tell the truth, but remember - today's truth can be tomorrow's ancient history. So, the Debtor's Exam is on a Tuesday - and the creditor's attorney asks you where you bank. You truthfully respond "ABC Bank". The creditor's attorney is not a  Judge so he/she has no power to issue a Court Order to you forbidding closing that account.  On Wednesday morning you close your account at ABC Bank and open one at DEF bank. In the off chance you are ordered not to close the ABC bank account, you simply open an account at DEF bank and leave $1 in ABC. You can move your money a lot faster than they can attach it.

 

The major problem with this plan is when a debtor's exam takes place in relation to payroll.  At my company we get paid every other Friday.  That means payroll drops by 10 am on Monday (Tuesday if Monday is one of the observed Federal Holidays) so that it can be processed on time and the ACH transfers made to employee accounts.  So for a company doing payroll that way any employee who did a DE after payroll dropped would not be able to close the account that fast and get their payroll transferred to the new bank at the same time.  ALL my employers have always told me to allow at least one if not two payroll cycles for any change in deposits to take effect and not to make any changes to automatic bill pay etc. until certain that the change(s) went through.  Not to mention to make sure the payroll department doesn't have a set limit on how many times you can change banks in a calendar year.  

 

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  • 4 months later...

ZOMBIE THREAD ALERT..Hi guys, you're all awesome for responding to my thread (Legaleagle2012 thanks so much for your help and input). I FINALLY received the lawsuit paperwork this week. I'm in Texas and being sued by NCT for around 15k worth of private student loans. I have already filed a response to the court saying I deny the prosecutions claims in their entirety and respectfully request a trial at the earliest available time. I spoke with the court in question and they said they're getting a new judge on Jan 1st and any potential proceedings wouldn't happen until at least mid-year. 

 

I have read extensively that NCT does not have proof of ownership for these loans (loan taken from Chase Bank circa 2004). One of many, many, links here: https://money.com/private-student-loans-missing-paperwork-lawsuit/

 

I stopped paying on these out of necessity in late 2019.

 

I don't make much money (around $18/hr) and I have almost $0 left over after I pay my car payment, rent for my room, car insurance, cell phone, and around $80 on a federal student loan.

 

I'm going to go in to this solo as I can not afford an attorney. I plan to show up to court on whatever day it is, and ask for the plaintiff to prove that I owe the debt by showing the original paperwork. Whether they have it or not, I don't really care...I'm going to do my best and if I lose...then oh well, I don't have anything aside from my job and paycheck and will seek some way to shield what little money I make from a bank levy. Goal is to just keep living, ya know? 

 

ALSO, they can't levy my 401k, right?

 

Monthly income after taxes and paltry $70 401k contribution: $2,500

Gym: $55

Cell: $65

Federal Student Loan: $100

Car: $380

Insurance $170

Rent/Utilities: $1,100

Prescription: $30

 

As you can see: I have around $150/wk. left for food/gas and god for bid I want a beer or need to fix a flat. 

 

Hopefully that paints a better picture now that the lawsuit is very much real.

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