Legal Question in Credit and Debt Law in North Carolina

You need to be more specific with your question. Has there been a lawsuit filed by the credit card company and a judgment entered? Is the credit card company a bank or a credit union? Is the bank account with the same bank or credit union as the credit card, or a different bank or credit union?

Assuming there is no lawsuit: If the credit card is issued by a credit union and the bank account is with the same credit union, probably yes. If the credit card is issued by a bank, the deposit account is with the same bank, and you consented to this ahead of time, yes, but most of the time this consent has not been given.

If the credit card company files a lawsuit and gets a judgment for money owed, and the person against whom the judgment was entered is served a notice of right to claim exempt property, and the person does not designate the funds in the bank account as exempt, yes money from a bank account can be taken. Social Security benefits are protected in a limited amount under Federal law, but generally if there is a judgment for debt and the debtor does not claim the funds in the bank account as exempt, a bank account can be frozen and funds seized to pay the judgment.

I agree with Attorney Coleman, Ordinarily, a credit card company cannot take funds from your bank account absent a judgment. The rules are changed though if you have a credit card at the same place that you bank. If you are behind on your credit card and you bank at the same place, then somewhere in the mice type of the agreements that you signed is something which gives the bank permission to take funds out of your bank account. This works the same way at a credit union too.

The other circumstance where this applies is where you have made credit card payments from a debit card linked to your bank account or where the credit card company has had access to your bank routing number and checking account number. I have had situations where people have either used their debit card or permitted authorized withdrawals to be made from their bank accounts in the past. In such cases, as the credit card companies already have the information in their files, they will go ahead and either try to debit your card again or withdraw funds from your bank account using the ACH (automatic clearinghouse) rules.

There is no real way to stop this. You can file a written dispute with your bank but the only sure way to do this is to close your account and debit card and get a new one at another bank. In the future, you do not use your debit card to pay credit card bills and you never allow a company to make automated drafts from your account. Instead, you use a bill payer service through your bank so that you can direct who gets paid, how much the creditor is paid and when. It requires you to be responsible and diligent rather than putting this on auto-pilot. I do not see that as a bad thing - you should be in control of your finances, not someone else.

Of course, if a creditor has a judgment against you funds can be taken, as noted by Attorney Coleman. But before the judgment can be enforced and money seized, you first have to be served with a notice of rights to designate exemptions and motion to claim exempt property. You would have to exempt your bank account on the form. If you get Social Security or some other exempt amount (worker's compensation, unemployment compensation or wages for the past 60 days) banks are supposed to protect this amount. If you had these types of funds and they were taken wrongfully, then you need to request a hearing before the court in the county where the judgment was entered and try to get the funds released. I have had a few clients get lucky.

If you only now have received the exemptions and motion, do not delay. Please contact an attorney - Ms. Coleman, myself or someone else to help you fill out the forms correctly. I charge a reasonable fee to do so; you can contact me at [email protected] if interested.