What can I do about a frozen bank account from a debt collector?

Asked over 3 years ago - Pompano Beach, FL

Hello.. In 2000 I received a credit card with a $500 limit soon after I was unable to make payments. In 2004 the debt collectors whom purchased the debt won a civil case against me for $500-$2500 since i didnt show up in court do to fear and stupidity. As on Yesterday Dec 16, 2010 my bank account became frozen from this same organization. I am unemployed and have been for the past 2 years so my account had a whopping $3 in it. I dont know what to do I called the debt collectors and of course they say I owe $3,000 from a credit card that was only $500.. I have no money and my unemployment just ran out and a job is extremely difficult to find.. I would like to know if somehow I can get this judgement overturned I agree I owe them $500 but $3000 is out of hand.. Thank you in advance, Ann

Additional information

Ty both for your answers Mohammed , Yes the exempt in FL would be a Home...Dorothy, Considering the debt collector most likely bought this debt for $50-$100 or less (they purchase these for pennies on the dollar) from a very unsubstantial credit card company which no longer exists.. Court costs..$700 more like $175.. I disagree. I dont want someone to read it and not know the actual facts.
Just to update people on the laws ...If you receive any funds from the government such as unemployment,SS,public assistance, etc. The debt collector must remove( in most states) the hold on your account for these funds they are considered exempt. Contact your bank and Contact the Collector just make sure you have at least 3 bank statements to prove this to them.. I hope this helps someone.

Attorney answers (4)

  1. Mohammed Omar Badwan

    Pro

    Contributor Level 12

    1

    Best Answer
    chosen by asker

    Answered . Each state has different exemptions regarding what personal property creditor's can garnish/seize. Ultimately, you can apply these exemptions to personal property and creditor's can not touch them. For example, in Illinois there is a $4000 wild card exemption. Illinois residents can apply this exemption to any personal property they own or have legal title to. Therefore, an Illinois resident can apply that exemption towards a bank account and a creditor can not seize the first $4000 in the bank account. Research Florida's exemptions and act accordingly. Good luck!

  2. Will Murphy

    Contributor Level 15

    Answered . If you want to try to set aside the default and default judgment you typically need to show a meritorious defense, that the default was entered through excusable neglect and due diligence in setting it aside. Another route is if you can show the court lacked jurisdiction, or that the judgment was entered through a fraud on the court.

    Another option is to simply defend their collection efforts, such as by asserting an applicable exemptions.

    Another option may be bankruptcy protection.

    Another is to seek a voluntary settlement. As another answer pointed out, these cases are usually brought by someone that bought the claim against you for pennies on the dollar. Particularly given that you may be hard to collect from, they might be happy to accept $500 if you were able to come up with it.

    I hope your situation improves, and I wish you a just and speedy resolution of the case.

  3. Theodore Lyons Araujo

    Pro

    Contributor Level 20

    Answered . When you find out that a judgment has been entered against you, normally by discovering that your wages are being garnished or the bank account has been frozen, you still have a couple of options.

    In most States the Courts allow you to reopen and challenge a “default judgment”. Most States will allow a year to accomplish this. If you did not get the paperwork for the lawsuit, or you got the paperwork but never did anything, then the judgment was “entered” due to your default to file an Answer.

    You have to bring a motion in the Court where the judgment is filed. That motion normally has to include a defense to the charges and a copy of your proposed Answer.

    You should definitely get a local lawyer to help you with this, or seek the assistance of a Bankruptcy attorney to get rid of the liability. If you can’t afford a lawyer and you are being sued check out my website for a free form Answer.

    Good Luck!

    REQUEST: Please give this answer a "thumbs up"(below) if you find it valuable.

    Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only and the fact that he has worked as an Assistant District Attorney; State Supreme Court Clerk; Special Assistant United States Attorney (Hawaii); Assistant Cornell University Counsel or Judge Advocate, United States Marine Corps should not be relied upon to assume that these statements reflect the policy of these organizations.

  4. Dorothy G Bunce

    Pro

    Contributor Level 20

    Answered . Would it make a difference to you to understand how a $500 debt turned into $3,000?

    If the interest rate on that credit card was at 18%, the dollar amount of interest charged would be about $3.50 each month. Every month that goes by, the unpaid interest gets added to the original balance, so the interest payment gets higher & higher because the unpaid balance gets higher & higher. If the contract for the credit card provided for late charges, and most do, that might have started at $30/month, or even more.

    Just to keep it simple, take $3.50 and add $30 to it for a minimum monthly charge. Multiple that amount by 120 (10 years). What do you get? I calculate $4,020 just for interest & late charges, not counting that the amount owed for interest would increase every month as the balance increased.

    And remember, this amount doesn't even include paying your original $500 balance!

    When the court enters a judgment, they always add in attorney fees for collection costs, plus the court fees, the delivery fees, etc. That would be at least $700, don't ya think?

    So the total I would calculate is $5,220, which makes that $3,000 seem very reasonable to me! And I have never represented creditors!

    So I hope this info lets you see your debt from another perspective. Sorry to seem like a grinch.

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