Can Bill Collectors Take Your Assets?

When bill collectors start calling you, they may use all kinds of threats to get you to pay your bill. In many cases, collectors will threaten to seize your assets to repay the debt. While they may not always truly have the intent of taking your assets, they may have the right to do so.

Suing for Judgment

Before a creditor can take your property, it must get a judgment against you. Prior to getting a judgment, the creditor must file a civil lawsuit against you. If the debt is a secured one, such as a mortgage or an auto loan, the creditor can seize those assets. If the debt is unsecured, the creditor can get a judgment and seize many different types of property. A lawsuit typically will not be filed until the original creditor or a collection agency tries to collect the money from you.

Bank Accounts

One way that a creditor could potentially get the money that you owe is to levy your bank account. Once the creditor gets a judgment against you, it can potentially use that judgment to take the money out of your account. The creditor must get a writ of execution before the money can be taken out of the account. At that point, the creditor can contact your bank and take the amount out of your bank account.

Personal Property

The creditor also may decide to try to take some of your personal property when you owe money. After the creditor gets a judgment against you, you may receive a packet in the mail from the sheriff's office. This packet requires you to provide information about your sources of income and your personal property. You must fill this out or risk being in contempt of court. At that point, the sheriff will know what assets you have so that they can be seized.

Exempt Property

Although the creditor can take many of your assets, certain items are exempt from being taken. For example, if you receive Social Security or disability benefits, creditors cannot take these from you. Creditors also cannot take your home. They can place a lien on your property, which means that your debt must be paid if you sell the home. Each state has a list of certain property that cannot be taken by creditors.