Legal Question in Credit and Debt Law in California

As a business owner who operated business as a Corporation, I opened a Business Credit Card in 2003. I had an issue with the credit card company and stopped paying my payments in 2007. This week I noticed that that same company had placed a Levy on my personal bank account and removed a couple of hundred of dollars. I was under the impression that the SOL was 4 years. My questions are 1.) How do I dispute the Levy? 2.) Is there a limit on how many times they can try to Levy from my bank account or is it a once only transaction? 3.) Can I claim exemptions which would make the Levy unenforecable? 4.) Is there a SOL for the creditor to collect on a Levy? 5.) Since I ran my business as a Corporation, wouldn't my personal bank accounts be exempt from such a Levy since it was a business card? 6.) I have a Family Limited Partnership (FLP) and would I be able to protect my assets(autos, bank accounts, house) by placing them in the FLP as a form of asset protection from any future attempts to collect by creditors?

Asked on 8/31/12, 12:05 am

1 Answer from Attorneys

Timothy McCormick Haapala, Thompson & Abern, LLP

1. Impossible to say without much more information. 2. No. As many times as they want until satisfied. 3. Maybe; again impossible to say without a lot more information. 4. In order to levy your account the creditor must have obtained a judgment. THAT is your real core problem here. They must have obtained a judgment against you personally. If you have grounds to set that aside you need to do so immediately or lose the right to contest it. If the judgment stands against you personally, all your personal assets are potentially subject to levy/execution of the judgment. 5. Yes but only if they don't have a judgment against you personally. Apparently they do. They probably made you personally guarantee the card. If not, contest the judgment immediately. 6. NO. Asset protection is from the bottom up. A judgment against the FLP cannot result in them going after your personal assets if everything is done right. The reverse is NOT TRUE. Your interest in the FLP is just like any other asset, and anything you put in it is theirs for the taking. Think of it this way, if you hold 1,000 shares of Google, they certainly can seize your shares of Google if they get a judgment against you, but if someone gets a judgment against Google, they can't come after you for payment. Works the same with a Limited Partnership (mostly).

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Answered on 8/31/12, 12:23 am

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