Creditor can garnish checking, savings accounts

Q. A credit card company is suing me. If it wins, what can it do? Can it take the money I have in the bank or my IRA? Can it put a lien on my house? I am worried about what will happen next.

A. If the creditor wins in court, it will be awarded a “judgment” against you. The creditor must then “execute,” or enforce that judgment. In Texas, a homestead is “exempt” and generally cannot be taken to satisfy a judgment. In other words, you will not lose your house. Most personal property also is exempt, up to $30,000 for a single person and $60,000 for a family, and cannot be taken to satisfy a judgment. Finally, money in an IRA also is exempt and may not be taken. Money in the bank, however, such as a checking or savings account, is not exempt and may be taken to satisfy the judgment. After the creditor is awarded a judgment, it may ask the court for a “writ of garnishment” to attach your bank account. The money in the account will then be applied to the amount you owe. You do not want to leave a lot of money in a checking or savings account after you are sued. To learn much more about what can happen after you are sued, look at the debt collection section on my Web site, www.peopleslawyer.net.

Q. A debt collector is hounding me for car loan I could not afford to pay. He told me he would settle if I paid 50 percent right now. He also told me he would sue and my wages would be garnished if I didn’t settle. I can’t afford to pay, but I am afraid I will lose my job if my wages are garnished. Any suggestions?

A. I have a suggestion — tell the debt collector that you know your rights and that in Texas there is no wage garnishment for this type of debt. Wages may be garnished only for child support, student loans and certain taxes. You should also let him know you know about our state and federal debt collection laws that he has violated by threating to take action prohibited by law. Then, offer to pay what you can afford, as settlement in full of the debt. My guess is that the discussion will go much better once the debt collector knows you know your rights.

Q. Does a landlord have to pay interest on money he holds as a security deposit.

A. In Texas, a landlord does not have pay interest on a security deposit. In light of current interest rates, you are no losing very much.

Q Is a pre-nup the same as a will?

A. A will is the document you prepare to deal with your property after death. A pre-nuptial agreement is what you sign before getting married to determine how property will be divided during marriage or after a divorce. They are very different documents and serve a very different purpose.

Q. I have a power of attorney for my 87-year-old mother. The nursing home where she is staying has started sending her bills to me. Am I responsible for her debts because of the power of attorney?

A. If the home is sending you her bills to pay on her behalf, you should not be concerned. On the other hand, if they are billing you personally for her obligations, you need to make it clear that you are not a responsible party. The power of attorney gives you the right to sign documents and act on behalf of your mother, but it does not make you responsible for her debts. For example, it gives you the right to pay her nursing home bills from her accounts. It does not, however, make you responsible if she doesn’t pay. For you to be responsible to the nursing home, you must agree to pay. Unless you have signed something or otherwise agreed to pay her bills, you have no liability. I suggest you promptly contact the nursing home and clarify your liability.

Do you want to know more about your legal rights? Visit my Web site, www.peopleslawyer.net.

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