Checking account garnishment

[devota]

What is the name of your state (only U.S. law)? CO

about 3 1/2 years ago, my husband had a Capital One account that we got behind on and was eventually forwarded to an attorney. Shortly after receiving the first notification from the attorney, we set up a payment plan with the attorney via a credit counseling firm, with terms that the attorney representing Capital One agreed to. Since then (for the past 3 1/2 years) we have been paying the attorney $306 a month through the credit counseling firm. Since the payment plan was set up, we have not had any futher communication from either Capital One NOR the attorney, presumably because we were holding up our end of the bargain by paying the agreed upon amount every month and on time (the payment comes directly out of our checking account on a specific date each month and is dispersed to the attorney). This morning, I realized that my checking account had been wiped completely clean and was overdrawn. I contacted my bank who informed me that Capital One had garnished our checking account. We immediately called our credit counseling agency who told us that we were in fact up to date on payments and only had around a $600 balance on the Capital One/attorney account. The garnishment was for over $1400 (everything we had in the bank...). First of all, can they garnish my bank account without any prior notification? Also, can they garnish my account when we have been in a payment agreement with them for 3 1/2 years that they agreed to? And how can they garnish more than what we owe? (I'm not even sure that they are finished garnishing -- we are terrified that they will empty our account next week when both my husband and my direct deposits go to the bank, leaving us with no money for rent, gas, food, etc.)
We are so confused and don't know what steps we need to take to resolve this. Any help you can offer would be greatly appreciated.

[JETX]

Originally Posted by devota

First of all, can they garnish my bank account without any prior notification?

If they have a judgment against you (or post makes NO mention), then YES, they can garnish at any time.

Also, can they garnish my account when we have been in a payment agreement with them for 3 1/2 years that they agreed to?

Yes.

And how can they garnish more than what we owe?

They can also recover any post-judgment interest or account interest accrued in the interim.

If this is truly as you claim (agreed payment plan, with payments on time and amount), I think what they have done is pretty crappy... but if they have a judgment against you, not illegal. You should also get a notice of the garnishment showing how to file an exemption with the court. I don't see anything in your post that would qualify for an exemption, but I would file anyway. The court might not look kindly on their actions and could release the frozen funds.

[devota]

Thanks for getting back to me...

As far as I know, there has never been a judgement entered against my husband -- we never received any court papers (other than the initial letter from the attorny threatening to sue if we did not make arrangements). And we have not had any communication from either Capital One or the attorney since we entered the payment agreement indicating that the agreement was no longer any good. As I mentioned, the payment has been going straight to the attorney for the past 3 1/2 years via the credit counseling agency (it is a direct withdrawal on the 20th of every month and no payment has ever been missed -- until this month. We had to call today to cancel our upcoming payment because we have absolutely no money left in account due to this garnishment. This makes me sick to think about because our payments through the agency, which holds 2 other accounts that now will not get paid, was due to end in 2 months. Now we are back to square 1). Is there any recourse that we can take here, or are we basically stuck? My biggest fear is that they will continue to garnish and wipe out our account when my husband I get paid next Friday, leaving us with no money for rent, power and phone bills, etc.
It's really sad that we have been doing the right thing and are still getting the short end of the stick...

[annajosie]

my advice would be to STOP any direct deposits immediately. I don't know about recovering what they have already taken, but I know that Capital One is a piece of crap.

Good luck to you.

[nrknlknek]

You can't take reasonable steps to resolve a problem until you understand the problem. The first thing you need to do is determine whether or not there is a judgement against you. You can do this simply by calling the clerk of the court (many court systems have this information web enabled these days). As any such judgment is a matter of public record, you are entitled to the relevant information which includes the identification of the judgment creditor, the date the judgment was entered and the full amount (which would be augmented by the interest accrued on the judgement amount at the statutory limit from the date of the judgment through the present). If a judgment was in fact entered and you are quite honestly certain you were never served, you may elect to retain an attorney who may file a motion to vacate. If this is the case, you may also be entitled to assert additional claims against the judgment creditor. All that said, if the judgment against you exists, the creditor is entitled to levy your accounts, assert liens and gasrnishments in satisfaction of their claim. But, they must have a judgment first and these remedies are availalble to them untill such time as you have that judgment vacated or otherwise settle the dispute.

[Wirelessany1]

One question for you... Do you bank with Capital One as well?

[debtcollector`]

Originally Posted by devota

As I mentioned, the payment has been going straight to the attorney for the past 3 1/2 years via the credit counseling agency (it is a direct withdrawal on the 20th of every month and no payment has ever been missed -- until this month.

That doesn't mean the payment has been made to the attorney or that the payment was on-time. It means your "credit counseling agency", which may be one of the many scam companies out there, got paid. You need to make sure payments were sent to the creditors and when -- ask for an accounting of all payments.

Originally Posted by devota

We had to call today to cancel our upcoming payment because we have absolutely no money left in account due to this garnishment. This makes me sick to think about because our payments through the agency, which holds 2 other accounts that now will not get paid, was due to end in 2 months. Now we are back to square 1). Is there any recourse that we can take here, or are we basically stuck?

My sense is that you got conned and are now facing the reality of that. I hope not, but it seems to really slam people when they discover that all the money they paid the "debt counseling company" is gone forever.

Originally Posted by devota

My biggest fear is that they will continue to garnish and wipe out our account when my husband I get paid next Friday, leaving us with no money for rent, power and phone bills, etc.

Call the Salvation Army.

Originally Posted by devota

It's really sad that we have been doing the right thing and are still getting the short end of the stick...

No, the right thing to do was to face your problem yourselves and handle it yourselves. You choose to put a third party into the situation and abdicated your responsibilities to them. Paying someone to be responsible for you, doesn't make you responsible and it darn sure doesn't mean you are doing the right thing.

DC