How to Keep My Lump Sum Benefits From Possibly Being Garnished

[icloud987]

I made some mistakes and got into lots of credit card debt. Most are charged off. Some are with OC. Some are with CA. I am about to receive a lump sum payment from VA for the past few months, GI Bill BAH. I have plans to use this money to settle most of the debt. But I can' stop worrying. Would the creditor and CA see that money through Chex Systems as soon as I receive it? Then they might try to garnish it? Then I won't have access to that money that I will use to settle the debt. Can I transfer this money to my significant other's account to protect it till I use it?
I believe I am judgment proof. I dont have a job.
I am not sure if gi bill BAH is exempted from garnishment or not?
Can anyone share your insight, please?
Thanks

[icloud987]

I made some mistakes and got into lots of credit card debt. Most are charged off. Some are with OC. Some are with CA. I am about to receive a lump sum payment from VA for the past few months, GI Bill BAH. I have plans to use this money to settle most of the debt. But I can' stop worrying. Would the creditor and CA see that money through Chex Systems as soon as I receive it? Then they might try to garnish it? Then I won't have access to that money that I will use to settle the debt. Can I transfer this money to my significant other's account to protect it till I use it?
I believe I am judgment proof. I dont have a job.
I am not sure if gi bill BAH is exempted from garnishment or not?
Can anyone share your insight, please?
Thanks

[Anonymous]

The only way anyone can garnish your accounts is if they have a judgement against you. You have not stated that this is the case only that the cards are in collection. If you owe back taxes then the IRS can garnish for that but you do not mention that either.

You may need the help of a lawyer or a debt reduction agency to negotiate a much lower amount to pay off and settle each debt. Unless you have a legal background I do not suggest you do this yourself. I also do not think it is wise for you to try and settle in full as these debts are now charged off and you can probably make them go away for a fraction of what you actually owe.

Thanks

Mark

[icloud987]

Thanks for your kind advice.

I read before ,that many people woke up to find out their bank account is sudden frozen , because the creditor can levy or garnish the account without any notice given out. I am just scared,if they can see I received a lump sum on any online system , they might act quick and freeze my account ?

All I owe is credit cards debt.

I talked to a lawyer, he told me I can do this settlement myself since I am unemployed, which gives me the leverage to negotiate. What's more, half of the creditors are offering me a 30% settlement offer, I dont know if a lawyer can get it lower than that, plus the lawyer cost?

What do you think ?

I am a little worried about settling the ones who are with  CA, as I read they can be shady and the debt may go through many different CA hand's,  is it possible that after I receive DV letter from a CA but before I pay this CA when we are in the process of negotiating, this debt can be sold again to another CA and they won't tell me, just scam the payment out of me? 

Or as long as they can show me the DV, I can pay them after I get an agreement in writing?

Thanks so much for telling me it is no good to settle in full. I was having a hard time deciding if pay in full or settle. I have spent very little time on this forum and I have seen many people choose to pay in full to Navy Federal so they can keep Navy Federal. Is that worth it usually? 

If I am banned from navy federal because I didn't pay in full, does that mean I won't be allowed to be added as an authorized user either?

My debts are with many different banks, now thinking about many of them if not all will never issue me a credit card or loan again for the rest of my life, that is very scary too. I am still young. 

Thanks for your time

[tnhomestead]

If you post the debts and amounts, folks here can help better. If no one has a judgement against you, they can't touch that money except of course for the IRS. Ask me how I know! 

Settle yourself, you don't need a lawyer. Call and offer 20%, see what they say. You can always go up, hard to go down! Decide what you will agree to in advance, and don't go over that. If they say they will sue, deal with the attorney. Just if you get served, show up at court no matter what! 

Always get it in writing, and keep it forever! Had an insurance company come after me 6 years after their client hit me. If it's in writing, hard to screw you. Never never never allow access to your bank account, some will clean you out. Offer a money order instead.  I tell folks my ex had access and she cleaned me out, so why should I trust you?

Good luck

[icloud987]

Thank you so much.
I am new to the forum and still learning how to utilize it.
I am not very good at reading and understanding my credit report either. All I know is no collections listed. All accounts charged off except USAA and Auto Loan.
So I owed about 27000 to NFCU. It looks like it is with an house collection.
10000 to Barclay. I am not sure who owns the debt, I can still log in to online banking, but it shows me to call a number and won't let me do anything else.
5000 to chase. I still have online access, and it shows me pay XXXX towards 5000 or settle for 2000 on the website.
2000 to Home depot card. Not sure who owns the debt, several different CA has contacted me, but I dont know if they are collecting on behalf of home depot or not.
1000 to Citi. Not sure who owns the debt, several different CA has contacted me, but I dont know if they are collecting on behalf of CITI or not.
1300 to American express, some CA has contacted me and sent me DV, but I dont know if they are collecting on behalf of CITI or not.
2000 to USAA, card is still open, had late payments for past many months, I made a payment here and there.
A car loan with ally , on-time payments 99% of time. Plan to keep it this way if I can.
I have no assets. No job .only income is Veteran benefits.


I was going to file chapter 7 because some lawyers advised that. But I worry my disposable income will be too high as a single guy, even though my income is exempted income, I heard it could still cause issues or force me into chapter 13.
So I start thinking about debt settlement. I was going to settle with all of them,but I have seen many people here chose to pay back NFCU in full to get a second chance? I owe NFCU the most,I was hoping maybe I could be added as AU on my significant other's NFCU cards to get back with them. Now I am concerned if I dont pay in full , they will ban me for life?
I want to keep USAA too , because their auto insurance has given me the best rates.

Another thing is I hope I can rebuild my credit in 2 years, so I can buy a house in 2 years. Is that possible? My SO plan to add me as AU on most of the credit cards to help me rebuild as long as the banks would allow that.
The lawyer said BK would rebuild my credit quicker than debt settlement. But I have so many concerns, and dont know what is best.
Thank you for your time.

[SoCalGardener]

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@icloud987 wrote:

I made some mistakes and got into lots of credit card debt. Most are charged off. Some are with OC. Some are with CA. I am about to receive a lump sum payment from VA for the past few months, GI Bill BAH. I have plans to use this money to settle most of the debt. But I can' stop worrying. Would the creditor and CA see that money through Chex Systems as soon as I receive it? Then they might try to garnish it? Then I won't have access to that money that I will use to settle the debt. Can I transfer this money to my significant other's account to protect it till I use it?
I believe I am judgment proof. I dont have a job.
I am not sure if gi bill BAH is exempted from garnishment or not?

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What am I missing here? BAH is for housing, only, right? Or have things changed in recent years?

[icloud987]

Yes it is for housing only ,do you know if it is exempt income in most states? I am retroactively using it ,so I am expecting a lump sum 

[SoCalGardener]

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@icloud987 wrote:

Yes it is for housing only ,do you know if it is exempt income in most states? I am retroactively using it ,so I am expecting a lump sum 

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You said you intend to use it to pay off debt. That's not what it's for.

Sorry, I have no idea whether it's exempt--but I do know that it's intended for housing expenses.

(For those who don't know, BAH is a military benefit for people who live off-base; its only intended purpose--to the best of my knowledge--is housing, i.e., rent or mortgage payments.)

[icloud987]

The way I see it is whatever disposable income I have left on hand can be used to paying off debt or paying off living expense. If I got my basic needs taken care of and have left over money , I should be able to use it towards the debt . What else should I do ? Save it to be savings and ignore the debt?

[SoCalGardener]

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@icloud987 wrote:

The way I see it is whatever disposable income I have left on hand can be used to paying off debt or paying off living expense. If I got my basic needs taken care of and have left over money , I should be able to use it towards the debt . What else should I do ? Save it to be savings and ignore the debt?

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I didn't intend to get into a war of words here, and this will be my last comment.

All I'm saying is that, to the best of my knowledge, BAH is only supposed to be used for housing payments. I'm not the military or the VA, I don't make the rules, I just happen to have a family and friend military background and know what BAH is.