My daughter recently received a summons for credit card debt with Capital One Bank. She is on disability and lives with me. Can her SSI be garnished for this bill? The only item she has in her name is her 2001 used car. I purchased it for her but put the title in her name so that she could get her own car ins. She doesn’t own anything else. Can the company come after me since she is in my home? The bill is her individual account. She has been avoiding calls from her creditors because she is unable to handle the stress of dealing with them. What should we do at this point?
Generally speaking, government administered benefits, such as SSI, cannot be garnished by creditor trying to collect on a debt. However, if your daughter deposits those benefits into a bank account and then co-mingle the funds with money from other, non-exempt sources, proving the exempt status of the funds may be quite difficult. My suggestion is to open a new bank account into which she would deposit all of her exempt funds, and maintain another account for any non-exempt funds she may receive (gifts from friends, income from part-time work, etc.). She may also want to notify her bank that the funds being deposited into the exempt account should not be garnished/levied upon, and that the bank should refuse any garnishment/levy orders it receives.
The bank may or may not be able to guarantee that a levy will not be placed on the exempt funds, but taking these steps should offer your daughter at least some level of protection. If a creditor does place a levy on the bank account containing exempt funds, she will likely need to file a notice of exemption with the court, and attend a hearing to request that the funds be released back to her. If the court determines that the funds are exempt from attachment, it should release the money back to her.
You should keep in mind that a creditor generally cannot attempt to levy your accounts until it has obtained a court ordered judgment against you, so with the litigation currently at the summons stage, you should have some time to take the steps mentioned above to protect yourself.
I would also encourage you to consult with an attorney licensed to practice law in your state to determine what action you should take in regard to the lawsuit that has been filed against your daughter, and what steps you and her need to take to protect both of your assets from the creditor. Because your daughter is on disability, she may be able to find an attorney willing to represent her at little or no cost. The American Bar Association (ABA) has a terrific website that can connect you to a free attorney-referral service in your area, including those that specialize in helping people with limited financial resources. Visit abanet.org and simply select the state in which you live to find the legal service providers in your home state.
As for whether or not the creditor can come after you, again, you would have to consult with a licensed attorney in your state for this. But generally speaking, there may be certain situations that could cause your assets to become vulnerable, such as: you co-signed on the credit card agreement, or you and your daughter share a bank account, just to name two.
If your daughter hasn’t already done so, she may want to contact the creditor and explain that she is on disability. While many creditors may not care, some creditors might recognize this as ethically questionable (or potentially harmful to their reputation should your daughter's story happen to fall into the hands of a newspaper journalist or TV reporter).
Given your daughters situation, the creditor may be willing to at least compromise on the amount of debt, or offer an alternative payment arrangement, other that suing her. For additional information on negotiating with creditors, check out my previous answer to someone who wrote me last week. Visit our blog on medical debt help and find the part that says "my advice on negotiating payment options with any creditor..."
I hope this information helps you Find. Learn & Save.