Re: Can credit card companies seize personal bank account?

Posted by Boadicea (66.149.179.202) on June 11, 2004 at 23:30:30:

In Reply to: Can credit card companies seize personal bank account? posted by Debtuptomyneck on June 11, 2004 at 23:10:26:

I am sorry to hear about your sister's illness. I, as well as many on this board, can hardly fault you for doing what you felt you had to do to help her out. It's understandable that you are now overwhelmed by the bills that are starting to coming in, so clearly you have overextended your credit and recognize that you have a problem.

In answer to your questions, credit card companies generally cannot access your accounts unless they sue and get a judgment. However, *if* the credit card is from a financial institution where your account is located (for instance, you have a Citibank CC *and* a Citibank checking or savings account), it's *possible* that the terms of service state that they can seize funds in the account to cover a default. Outside of that, however, they cannot get access to your funds unless you grant them access by agreeing to an electronic debit or some such.

Whether you would be sued in small claims or not depends on the amount in question and the jurisdiction you are in. Each court establishes it's own criteria as to who can file in small claims and how much, but generally it is around $5000 or less for small claims.

How much the creditor can collect depends on the terms of service you agreed to when you got the card. Since these are recently acquired, there is a very good chance they will have all of the documentation available if they decide to sue. If they decide to assign it to a collection agency, it will probably be within six months of any default.

Since you currently have perfect credit, have you considered all of your options before allowing a default to occur? Have you looked at personal loans that would lower your total payment amount? Do you have any funds or a 401K loan available that would pay off at least some of these cards to give you breathing room?

Seven years is a long time to have bad credit. And creditors are much more likely to sue these days than in the past, so you may not be able to make it to the end of the statute of limitations according to your state. This is especially true if you're talking about thousands of dollars per account.

Please consider your options carefully before choosing to allow these debts to go into default. It's a really long row to hoe.

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