Thursday, March 14, 2013

Help! I’m being garnished!

Many people get their bank accounts and paychecks garnished without knowing why. Whether there is a legitimate reason or not, you need to know why you are being garnished and what your rights are.

How can this happen?

Unless you are being garnished for unpaid taxes, child support, or student loans, there must be a judgment against you before you are garnished. If you didn't know there is a judgment against you, chances are you probably were not served properly. If service wasn't proper, you can get the judgment vacated. Call a consumer lawyer in your area to help you get your judgment vacated.

What can they take?

A judgment creditor can garnish your wages and bank accounts. However, unless your garnishment is for unpaid taxes, child support, or student loans, certain Federal benefits are exempt from garnishment:

  • Social Security Benefits
  • Supplemental Security Income (SSI) Benefits
  • Veterans’ Benefits
  • Civil Service and Federal Retirement and Disability Benefits
  • Military Annuities and Survivors’ Benefits
  • Student Assistance
  • Railroad Retirement Benefits
  • Merchant Seamen Wages
  • Longshoremen’s and Harbor Workers’ Death and Disability Benefits
  • Foreign Service Retirement and Disability Benefits
  • Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
  • Federal Emergency Management Agency Federal Disaster Assistance.

If the creditor has garnished exempt funds, you can demand a return of those funds and any garnishment fees.

How much can they take?

Unless your garnishment is for unpaid taxes, child support, or student loans, creditors can only take a limited portion of your wages. Depending on how often you are paid, different limits apply. 

However, creditors cannot take more than 25% of your net income.

If you feel that you have been improperly garnished, call a consumer lawyer in your area to help you get your money back.

Monday, March 4, 2013

How to Request Verification from a Debt Collector

One of the most important things you can do when a debt collector is hounding you (other than calling a consumer lawyer) is to request verification. A verification request letter (or a debt validation letter as it is often called) is a simple letter you can write on your own that will stop the debt collector from attempting to collect until the debt is validated. Because what the debt collector must provide in order to start collection action again depends on what you ask for in your verification letter, it is important to know exactly what you must include in your verification request letter. Following are some pointers for writing a verification letter.

1. Don’t send a generic form letter you find on the internet.

While a form letter can give you a good starting point in drafting a letter of your own, you should never send a generic form letter without tailoring it to your specific purpose. For example, there is a form letter floating around on the internet that states “I am not disputing the debt.” However, if you are disputing the debt, you should not tell them you are not disputing the debt. Another form letter states, “This is NOT a request for "verification" or proof of my mailing address, but a request for VALIDATION.” However, according to the Fair Debt Collection Practice Act (FDCPA), you are requesting “verification” not “validation.” 

2. Invoke your 3 verification rights.

The FDCPA provides 3 separate rights you can invoke in your verification request. (1) Dispute the validity of the debt or any portion thereof; (2) Request a copy of verification of the debt; and (3) Name and address of the original creditor. Be sure to invoke all three of them, because the debt collector must meet your requests to start collection again. 

3. Be specific and ask for everything you can think of

So what is this “copy of verification”? The jury is still out on that one. This means you should ask for everything you can think of. Ask for the original contract, the charge-off statement, proof of ownership of the debt, proof of last payment date, the full accounting and calculation of the debt, and anything else relevant to the debt. Must they provide all of this to start collecting again? Maybe. Will you get everything you ask for? Probably not. However, some debt collectors may be scared off when they realize they don’t have what you are asking for.

4. Send it early and send it often

You have 30 days from receipt of your initial collection letter to request verification in writing. If you miss this window, the debt collector will likely ignore your letter and continue collecting. If you receive additional collection letters, send more verification requests within 30 days of each letter.

5. Have proof

Send it via certified mail to prove that you sent it on time. Also keep a copy of your letter to prove the contents.

What now?

After you send your verification request, the ball is in their court. Keep all your documents and check your mail regularly. Hopefully, your verification request stops the debt collector from collecting. If the debt collector persists even after your letter, call a consumer lawyer in your area. If there are FDCPA violations, you may be entitled to damages under the statute.