BILL'S 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 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
July 25, 2010
July 25, 2010
Since you don't have facebook, please provide us with your location and a valid email address so we can answer it. Without a valid email address,we can't reply. (Go back to login with Facebook)
Due to the high volume of comments received, we cannot publish and/or respond to every comment received. If you have a specific question, we recommend you search our site for an answer before commenting.
* Bills.com will not share, sell, lend, or make public your e-mail address. We reserve the right to delete any questions or comments that violate the Bills.com terms of service.
We get a lot of comments! To help us show our boss that this is a valuable service, so we can keep providing it, we ask you to do 2 things before commmenting:
Log in
Like us
Submit your comment!
Due to the high volume of comments received, we cannot publish and/or respond to every comment received. If you have a specific question, we recommend you search our site for an answer before commenting.
* Bills.com will not share, sell, lend, or make public your e-mail address. We reserve the right to delete any questions or comments that violate the Bills.com terms of service.
Thank you for your comment. Your comment will be posted shortly.
Comments (2)