Legal Question in Credit and Debt Law in Arizona

defaulting on credit card debt

I was told by a bankruptcy lawyer that I can't declare

bankruptcy because I have a CD worth $14, is all the money that I have left after losing my investment due to the suicide of the firm's principal. I am 74 yrs. old. If I just stop paying my credit card debt, can the companies take my money without suing me?

Asked on 3/06/09, 11:02 pm

2 Answers from Attorneys

Brian Blum Blum Law Office, PLC

Re: defaulting on credit card debt

In some cases a bank that owe money to can take money that you have on deposit with them. This is called a "right of offset." It's easy to protect yourself against this: just don't keep money on deposit at the same bank that you have the debt with.

Otherwise, they would have to sue you before they could take your money.

If you have enough income, you can still probably file a chapter 13 bankruptcy and still keep the CD.

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Answered on 3/07/09, 10:28 pm

Jeff Biddle Biddle Law Firm, PLLC

Re: defaulting on credit card debt

If you filed a chapter 7, they would take the CD but if you filed a chapter 13, you could keep the CD but you would essentially pay the $14,000 to your creditors over the next 3-5 years. If you stop paying your debt, they cannot take your money without suing you first. If you place the CD into exempt assets, like your house, they will not be able to touch it but neither will you. An annuity may be an exempt asset that they can't touch, too.

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Answered on 3/08/09, 3:04 am

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