Can a 2nd Mortgage Co Drain our Account?

[Ethan1]

What is the name of your state? Michigan

We have an old second mortgage which we have been struggling to pay off for years. We have set up payment plans, and TRY to stay faithful, but we barely make it on my paycheck and can't always. Twice now, they have DRAINED our bank account without any prior notice, leaving us with overdrafts and NO money to live on. Are they legally able to do this?

[moburkes]

Originally Posted by Ethan1

What is the name of your state? Michigan

We have an old second mortgage which we have been struggling to pay off for years. We have set up payment plans, and TRY to stay faithful, but we barely make it on my paycheck and can't always. Twice now, they have DRAINED our bank account without any prior notice, leaving us with overdrafts and NO money to live on. Are they legally able to do this?

Did you give them permission to access your bank account for payments? Have you rescinded your authorization in writing? Have you changed bank accounts so they no longer have access?

[Ethan1]

Well, years ago they had a judgment against us, according to my husband. My husband says, if we change accounts or deny access, they will just take my wages through my employer. Is it all that hopeless?

[moburkes]

Originally Posted by Ethan1

Well, years ago they had a judgment against us, according to my husband. My husband says, if we change accounts or deny access, they will just take my wages through my employer. Is it all that hopeless?

This is different than what I thought. It might be better if they garnished your check, because they will only be able to garnish a certain percentage, while, right now, they can take your entire balance out of the bank. Have you tried talking to them?

Moburkes is correct. For Michigan...

Federal statute limits withhold up to 25% of disposable earnings per week, unless the debtor's earnings are at or near the minimum wage, 15 USC 1673, in which case no withholding is allowed.

Time Limit: Garnishment writ expires 91 days after issuance, MCR 3.101(B)(1)(a)(ii). A new writ must then be issued and served.

Stay of Wage Garnishment: Courts may grant the debtor an "installment payment order," MCL 600.6201, MCR 3. 104(A), which bars wage garnishment, provided that the debtor pays as required by the order. Such an order does not prevent garnishment of bank accounts or income tax refunds. MCL 600.6245, MCR 3.101(N). Some courts nevertheless do not allow any garnishment while an installment payment order is in effect.

The last paragraph is key. First you need to find out if there was a judgment against you in court and if the creditor asked to seize your bank acct. It may be that you just gave the creditor access to the acct through debiting/payment. Still, if a judgment was awarded, this can reflect on your credit report for many, many years and it is not good for future credit. (check your reports often.)

My advise is to change bank accts and to ...

look into the possibility of obtaining a court order allowing the judgment to be paid in installments. This avoids having to inconvenience your employer or others with whom you are dealing. As a last resort, look into bankruptcy. This will stop the garnishments.

[Ethan1]

Thank you.