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If a creditor sues you over a debt and gets a judgment against you,
they may try to collect money from your bank account or paycheck.
Some people don't even find out that money was taken out of their account
until a check bounces or their debit card is declined at a store.
Welcome to our video series about the basics of Debt Collection in Washington State
Welcome to our video series about the basics of Debt Collection in Washington State
produced by the Northwest Justice Project.
Can they take money out of my bank account?! Sometimes..
but they can't take certain kinds of money, like Social Security or Unemployment Benefits!
Can they take money out of my paycheck!?
Yes, but if your income is low enough, they may only be able to take a little bit,
or none at all. A creditor has to go through a legal process
and get a judgment against you to take money from your bank account or paycheck.
If they don't know whether you have a bank account,
or which bank it's at, you may get called into court
for an interview called, "Supplemental Proceedings."
You will be asked about where you bank,
where you work, how much you earn and if you have any property that can repay the debt.
where you work, how much you earn and if you have any property that can repay the debt.
If you get a notice about "Supplemental Proceedings,"
do not ignore it! You've got to give this information to the creditor,
either ahead of time or at the hearing. If you don't show up for the hearing,
the court might issue a warrant for your arrest!
You can find a free, helpful information packets called "Supplemental Proceedings" on WashingtonLawHelp.org
Even if a creditor gets a court judgment against you,
Even if a creditor gets a court judgment against you,
some kinds of money and property are protected and can't be taken—
that means they are "exempt" from debt collection.
You get to keep some money and property to live on,
even if you owe a debt. Here are some of the most common examples of exempt or
protected money you might have in a bank account. Social Security,
TANF, Unemployment benefits, payments for child support, most pension or retirement funds
What about my paycheck? Is that "exempt" from collection too? Some of it is.
What about my paycheck? Is that "exempt" from collection too? Some of it is.
There's a limit to the amount that a creditor can take out of your wages
You get to keep some money to live on. For example,
For example, if you're paid every two weeks, a little over $500
of every paycheck is protected. Be careful though,
because if your paycheck is directly deposited into your bank, the
the bank may place a hold on your account anyway. You may not even know about it until a check bounces or your debit card is declined.
the bank may place a hold on your account anyway. You may not even know about it until a check bounces or your debit card is declined.
the bank may place a hold on your account anyway. You may not even know about it until a check bounces or your debit card is declined.
Look on WashingtonLawHelp.org for a free packet about how to make sure that money in your bank account
Look on WashingtonLawHelp.org for a free packet about how to make sure that money in your bank account
or paycheck is "exempt" from collections and how to protect it.
I'm worried that they'll take my home or car away.
Can they do that? Some of the value of your home and many other kinds of property is "exempt" from collections—
Can they do that? Some of the value of your home and many other kinds of property is "exempt" from collections—
it's protected from creditors even if they get a judgment against you that says you owe them money.
it's protected from creditors even if they get a judgment against you that says you owe them money.
In Washington, up to $125,000 of the "equity" of a home is protected. Equity? It's the amount your home is worth
In Washington, up to $125,000 of the "equity" of a home is protected. Equity? It's the amount your home is worth
(how much you could sell it for) minus the amount of debt you owe on it.
How much could you sell your house for, do you think?
I think it's worth about $200,000.
And is it paid off or do you still owe money on the house?
Yeah, we have a mortgage—we still owe about $100,000 I think.
Well, that leaves about $100,000 of "equity" in the house.
You should talk to a lawyer to be sure, but it sounds like your house will be protected
You should talk to a lawyer to be sure, but it sounds like your house will be protected
because the equity is less than $125,000.
What about my other stuff though?
Many kinds of "personal property" like furniture and appliances, tools you need to work, and family pictures and keepsakes are
Many kinds of "personal property" like furniture and appliances, tools you need to work, and family pictures and keepsakes are
Many kinds of "personal property" like furniture and appliances, tools you need to work, and family pictures and keepsakes are
"exempt from collections" and protected up to a certain amount.
However, this is different than if you owe a debt on the car itself
like an auto loan.
With that kind of loan, the car may be repossessed. For more free information on debt collection and other legal issues,
With that kind of loan, the car may be repossessed. For more free information on debt collection and other legal issues,
including interactive forms and sample letters, visit
www.WashingtonLawHelp.com.
If you are low-income, you may qualify for legal help from the Northwest Justice Project.
Call the CLEAR hotline at 1-888-201-1014.
Call the CLEAR hotline at 1-888-201-1014.
Click here to watch another video on another topic,
or just keep watching to learn more about debt, collections and the law in Washington State!
or just keep watching to learn more about debt, collections and the law in Washington State!
This video was made in January 2014
The laws may have changed since that time. This video gives general information only.
The laws may have changed since that time. This video gives general information only.
Your unique situation may be very different than those shown in this video.
This video does is not a substitute for talking to a lawyer about your particular situation.
This video does not create an attorney client relationship
This video does not create an attorney client relationship
and it cannot predict nor guarantee an outcome in any legal proceeding.
and it cannot predict nor guarantee an outcome in any legal proceeding.