I have a judgment against me from a doctors bill and other related credit problems. Long story short, I was looking into a secured credit card, however I'm curious can the judgment put a lien on the secured credit card "account", meaning the money I paid to open the account and secure the credit line? Obviously I assume this would only be possible if the card wasn't carrying a balance against it, has anyone heard of this happening before? Sorry if this is a n00b question, can't seem to find the answer.
To any other creditor a savings account is a savings account, and if they get a judgment against you it's fair game for them to rob you blind, or to the point of your secured savings account balance as compared to the balance of your secured credit card. Example: Secured savings account: $1000 - balance on your secured credit card: $900. $100 therefore is fair game.
Heck, it's possible that a pre-existing judgment would have a claim that would be superior in right to the bank's right of offset. The judgmentholder might walk away with $1k and the bank might have to hope and pray you paid back the $900.
I'm with you guys on this, It sounds feasible either way. I asked someone on the phone for the bank and they said I should talk to a lawyer, but I was curious if perhaps someone on here knew the answer. I guess it could go either way, since it's not something secured like a car, I would assume it would be easier for them to possibly lien this money than some other type of secured loan.
Yeah, just to clarify this would be a new account I would be opening for the secured card, the judgment would predate the account.
As a practical matter, a bank in another state with no branches in your state would be less vulnerable. The judgment would need to be filed in the new state under the UEFJA in order to get at the money directly. However, a judge in your state could issue a turnover order against you that would require you to close the account and give the money to the judgmentholder.
Generally only an IRS lien or attachment would supercede the banks collateral and security agreement with regard to a secured credit card. Not a personal judgement from doctors, etc. This is the primary reason banks have "risk" with reagrd to a deposit account secured credit product. Hope this helps
Well if the judgment creditor finds out where the debtor has a bank account then the judgment creditor's next step is to attach the account (levy on it, freeze it, garnish it, we're just talking nomenclature here). The bank just has a contingent right of offset ... the judgment creditor who uses an attachment remedy has an absolute, already adjudicated right to the money. That's probably why you hear of people who have judgments against them getting turned down for even secured cards.
I won't disagree with you as lenders have different criteria for determining how much risk they are willing to accept with regard to people who have judgements. It is also indicative of the fact that many who have judgements also have problems with IRS. As an underwriter I can tell you that its the IRS we worry about. It's highly unlikely a judgement can break a banks right to offset, its collateral and security agreement, etc. You need lots of legal paperwork and a couple of lawyers to discover and then enforce it. Its just to expensive for someone to undertake.....despite the fact that it has been adjudicated. Why do you think so many judgements go unpaid?
I will say this: I know of someone who was able to get a secured credit card despite a sizeable judgment.
Secured Credit Card You need to look at the cardholder agreement. If the bank received a security interest in the entire savings account, regardless of the balance, it may not matter what the card balance is. If the security agreement provides that the bank has a security interest only to the extent that there is a card balance, then the difference between the account balance and the credit card balance might be subject to garnishment.
