A collector can’t garnish anything without a court judgment. Collectors obtain a court judgment by filing a lawsuit, serving a summons and complaint, and eventually obtaining a judgment. Seniors and disabled persons normally have nothing to worry about if faced with a judgment for old debt. Collectors cannot garnish federally protected income like Social Security, pensions, VA and disability benefits. Federal banking rules also automatically protect from garnishment twice the amount of monthly Social Security deposited into a bank account, no matter the source of funds in the account at the time of the garnishment. However, sometimes persons may have extra money that is not from a protected source, such as proceeds from the sale of some asset like a home or car. If that unprotected money is held in a bank account, it could be subject to garnishment. How then can that money be protected?
Sometimes a prepaid Visa card is suggested as a means to protect money from being garnished. A prepaid Visa card looks like a credit card but is entirely different. It’s not supported by credit issued by a bank; instead, it’s paid for with cash. A prepaid card allows you to make purchases using your own money rather than borrowing money from a creditor and paying interest and fees for the privilege. It’s just like paying with cash.
A prepaid card is also as different from a debit card as it is from a credit card. When you make a purchase with a regular debit card, your bank immediately deducts the cost of the purchase from the bank account the debit card is connected to. But with a prepaid debit card, you load money onto the prepaid card until it is used up, and then add more. A prepaid debit card is like a renewable gift card. The money on a prepaid debit card is not held in a bank account with your name.
Here are two links with Walgreen’s and Walmart that show how to get a prepaid debit card and explains in detail how they work:
Walgreens Reloadable Debit Cards
Walmart Money Cards
Judgment creditors would love to be able to garnish a Visa prepaid card – but they can’t. They would first have to find out about its existence. A prepaid card does not show up on your credit report and collectors have no way of knowing if you have one. The only way they’re going to find out about your prepaid debit card is if you tell them yourself, which you would never do. Putting excess money that’s above the protected limit in a bank account into a prepaid card is like taking cash out of your account. A creditor won’t be able to locate and garnish it.
Prepaid debit cards are a relatively new concept. There are simply no procedures in place for judgment creditors to access information in order to garnish those types of accounts.
Learn More About Other Issues and What HELPS Can Do For You.
FAQs
We are classified as as a charity by the IRS. Around one third of our clients receive our services for free. Our suggested fees are based on our client's ability to pay.
What does helps do for seniors? ›
HELPS' clients are senior citizens, retired persons, veterans and legally disabled persons. HELPS clients receive incomes protected by federal and state laws. They struggle with debt they cannot afford to pay.
Why should seniors not worry about old debts? ›
There are federal laws to protect VA benefits. There are state laws that protect IRA benefits and independent retirement accounts. So, seniors' income is protected by various laws, and if they don't pay their debt, or if they're unable to pay their debt, even if they're sued, it can't be garnished or taken from them.
How do I know if my debt relief is legitimate? ›
They Ask for Fees Upfront
This is the most obvious sign of a debt relief scam. If the person/company offers to help get rid of your debt but first you have to pay them a fee, they're probably lying to you. Cut off contact and file a complaint with us.
How do I know if a charitable organization is legitimate? ›
Potential donors should ask the fundraiser for the charity's exact name, website and mailing address so they can independently confirm the information. Use TEOS to verify if an organization is a legitimate tax-exempt charity. Don't give in to pressure. Scammers often pressure people into making an immediate payment.
Is there really a $900 grocery stimulus for seniors? ›
In conclusion, the idea of this grand grocery stimulus worth $900 for seniors is just that: a rumor. There is no truth to it. As a senior, if you find yourself struggling, numerous government programs, including food stamps, are a much better alternative than a fictitious idea to save money on groceries!
What is the most requested support service for the elderly? ›
What Services Do Seniors Need Most?
- Personal Care. One of the most in-demand services for seniors is personal care. ...
- Medication Management. ...
- Nutrition and Meal Support. ...
- Mobility and Transportation. ...
- Healthcare. ...
- Money Management. ...
- Safety and Security. ...
- Social Interaction Opportunities.
For example, anyone over 60 will receive free prescriptions from the NHS. You will also be eligible for a free NHS eyesight test, so you should definitely inform your optician if you still haven't had an appointment. If you're aged 65 or over, you can also get the free NHS flu vaccine.
How much debt does the average 70 year old have? ›
Average debt by age
| Generation | Average total debt (2023) | Average total debt (2022) |
|---|
| Millenial (27-42) | $125,047 | $115,784 |
| Gen X (43-57) | $157,556 | $154,658 |
| Baby Boomer (58-77) | $94,880 | $96,087 |
| Silent Generation (78+) | $38,600 | $39,345 |
1 more row3 days ago
In general, the answer is no, creditors and debt collectors cannot seize your Social Security benefits.
407, 652(b), 659 and 662(f)) LEVY AND GARNISHMENT OF BENEFITS. Generally, Social Security benefits are exempt from execution, levy, attachment, garnishment, or other legal process, or from the operation of any bankruptcy or insolvency law.
Are all debt collectors legit? ›
Real debt collectors will often try to get payment quickly, but if your collector is being very pushy, you should be suspicious. Scammers survive by getting people to pay fake debts before they have a chance to realize they're being scammed. So if a debt collector pushes you to pay immediately, be very cautious.
How can senior citizens get out of debt? ›
If you have high-interest credit card debt, a debt consolidation loan can help reduce interest payments. Other options for seniors looking to consolidate debt include a reverse mortgage, HELOC, or home equity loan. Groups like the Administration on Aging that offer resources for seniors in debt.
Are debt collectors legit? ›
Real debt collectors are from reputable companies with websites and reviews, and you can contact them if necessary. Ask the caller for the debt collector's company name, address and phone number. If a scammer is on the other end, they might try to avoid your questions and insist that the debt needs to be resolved.
What is a legitimate charity? ›
Legitimate charities will provide their EIN if requested, which can be used to verify their legitimacy. Taxpayers can find legitimate and qualified charities with the Tax Exempt Organization Search (TEOS) tool on IRS.gov.
