I have a friend who had a vehicle repo almost 7 years ago and there now taking a sum of 25% of his check what can he do and can they wait so long?

Here is my response: First, I think that your friend is not telling you the whole story. The 25% wage garnishment is the result of a judgment, which means that a lawsuit was filed against your friend and that a judge or jury found in favor of the vehicle finance company.

Surprisingly, I regularly hear from people who are sued, but who ignore the lawsuit. If you ignore a lawsuit, eventually a default judgment will be entered and the debt will change from an unsecured classification into a secured classification.

Armed with a judgment lien, the creditor/plaintiff has the right to garnish the defendant’s wages. What I am saying here is that your friend had plenty of notice that his wages were at risk and he chose not to take any action to protect himself.

With regard to the time frame, every State has a statute of limitations for various types of claims. If the statute of limitations is 6 years from the date of the repossession, the car lender can wait until the day before the statute runs to file the lawsuit.

Often claims like repossession deficiencies are bought by debt buyers for pennies on the dollar. It would not surprise me to learn that the plaintiff who sued your friend was not the original car lender, but a debt buyer who bought the note and pursued the available legal remedy.

There are also situations where a debt buyer will file suit on a debt that is stale, i.e. the statute of limitations has run, expecting that the defendant will not respond. This immoral and probably illegal tactic has become more and more common and if your friend thinks that this may be the case in his situation, he should contact a lawyer as soon as possible to discuss.

I am having a problem with a collection agency over a debt that I cosigned with my exhusband on. I am currently waiting on debt validation papers. However they have called me and said that they will freeze all of my bank account. My minor child has a checking account that I am on. Can they freeze her account too?

Here is my response: Firstly, I am not aware of any process in which a private debt collector can “freeze” your bank account if there is no judgment filed against you. The only exceptions to this would be for some student loan debts, some tax debts and child support/alimony type of debt.

Assuming that we are talking about credit card or other similar type of debt, I think that the collection agency is blowing smoke when they say that they can freeze your accounts. If you speak to them again, I would ask for clarification on this freeze - ask them to put it in writing to you and ask the collector to identify himself and explain it slowly as you are recording the conversation for possible use in litigation. My guess is that the freeze threat will go away very quickly.

As a co-signer, however, you do have potential liability. If the creditor sues you as a co-signer and obtains a judgment, it can go after any asset it finds. Depending on where you live, your joint account with your child is at risk.

There may be different kinds of bank accounts that would work better in this situation - for example, you might be able to set up a bank account for your minor child in which you are the trustee, but not a co-owner. This type of arrangement would most likely work for future deposits, but you could have some issues with the funds currently in that account. Most States have fraudulent transfer rules that allow a creditor to reverse transfers of assets made in anticipation of litigation.

This is a situation where you may want to seek counsel - first to see if you have an FDCPA action against the collector for misrepresenting his power to freeze your account, and second to determine what risk you have if you change the account structure for your child’s account.

This means that if you are sued, your judgment creditor cannot seize your Social Security check, nor can they seize money from Social Security that happens to be in your savings or checking account.

I recommend to my clients that they avoid co-mingling Social Security funds with other funds, and that they notify their bank in writing that all of the funds in Account XYZ come exclusively from Social Security.

This protection against seizure does not apply to the IRS when collecting tax debt, nor does it apply to child support creditors.