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Can a Reverse Mortgage Be Garnished - The Bills.com Blog
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Can a Reverse Mortgage Be Garnished
Tuesday, Oct 27, 2009
Question: Can proceeds from a reverse mortgage be garnished, such as to pay off a debt?
Answer: Garnishment is customarily defined as the diversion of a debtor's wages to pay a creditor for a debt.A reverse mortgage is a line of credit on which regular withdrawals are made. Since it is a line of credit, not a debt owed or property held by a third party, there is really no way for the creditor to garnish the reverse mortgage account. It would be like garnishing the available credit line on your credit card. Therefore, generally speaking, monthly payouts from the reverse mortgage cannot be garnished.
Some reverse mortgages are paid out in lump sums, though, rather than as credit lines, so it would be easier to levy if deposited into a bank acct. Also, if reverse mortgage payments are deposited
into a bank account each month, they do not have any specific exemption and could be levied along with any other non-exempt funds in a bank account belonging to a judgment debtor.
However, I hasten to add that I cannot find case law to support my opinion above. I cannot find any case law where a creditor has garnished a disbursement from a reverse mortgage successfully, either.
However, that does not mean no creditor has ever
However, I hasten to add that I cannot find case law to support my opinion above. I cannot find any case law where a creditor has garnished a disbursement from a reverse mortgage successfully, either.
However, that does not mean no creditor has ever
garnished a reverse mortgage disbursement. Therefore, I urge you to consult with an attorney in your state who has experience in consumer law. He or she will be able to research this issue in your jurisdiction and give you a more accurate answer.
To read more about collections, see my answer to another reader who needed Collections Advice .
I hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
To read more about collections, see my answer to another reader who needed Collections Advice .
I hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
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