Can credit card companies take your money or property if you don’t pay?
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Can credit card companies take your money or property if you don’t pay?
About half of my income is going to pay income taxes that I couldn’t pay last year. The credit card interest is awful (23%). Can they take the money out of my bank account or take my home or car if I don’t make the payments? My income is direct deposit from Social Security retirement.
Asked on September 25, 2011 under Bankruptcy Law, Oregon
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
First of all, if you owe for a debt and cannot pay, a creditor would have to sue you in court and obtain a judgment. Once a judgment was granted, then your creditor could proceed against your assets (i.e. money or property). That is all of your "non-exempt" (i.e. not legally protected) assets.
Social Security benefits are considered to be "exempt"; therefore they are protected under the law. However the best way to do this is to have them deposited directly into your account (as opposed to depositing a SS check yourself into the account).
A house is offered protection in many states as a "homestead". However, if that is available the law on this varies from state-to-state. My research suggests that in OR the first $40,000 of equity is exempted ($50,000 for a married couple).
A car can be seized but it typically depends on the model year and condition; it is almost never done on an older or high mileage car. The exemption for motor vehicles in your state is $3,000 in equity.
At this point, you may want to consult directly with a local attorney. They can best advise you more fully as to current state law.
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