Time barred debt & 3rd party collection firms

[Ethan0vegano]

The 3 pronged question I have regarding the incident described below boils down to:
How was the new account data obtained, could it happen again, & can it be prevented?

To anyone with expert knowledge I wish to thank in advance for clueing me in.

When a new interest bearing account is opened, the pertainent data gets to the IRS. It's inevitable and therefore understandable.
What I don't understand is how an out of state third-party collection company with a sleazy reputation obtained that kind of information.

A few years ago I had a primary non interest bearing checking account with a well known interstate bank. (That bank was rebuilding it's public image after their recent account opening scandal). After awhile I opened a savings account that was purposed for holiday season spending or any emergency if it occurred. Simple and humble, $10 a week minimum. It hadn't been long when I went online to see a $0.00 balance. The bank explained that the $45 was withheld due to a judge's order from a jurisdiction I hadn't lived in for almost 15 years. The 3rd party collection firm that sought the order was headquartered in a different state where I had never lived.

With the case number the bank gave me, I reached the clerk of the court who gave me specific details. I then told the clerk this was about a time barred debt well past the state's statue of limitations and the info they had proved that fact. I surmised this action was an attempt of intimidation. So I never acknowledged responsibility and kissed $45 goodbye, not too much to forfeit for a lesson well learned.

In recapitulation, how did a private company become aware of my newly opened account so quickly. Is there specific data mining software for collection companies scouring the internet 24/7? system that alerts them the moment there's a social security number match?

I'm now maintaining a non interest bearing checking account with a hometown bank with 3 branches in my state and 1 in a neighboring state. Since interest rates are pitiful, another savings account isn't worth the trouble. But if I were to try again, could the same thing reoccur and are there ways too block all except the IRS access to the data?
Lastly, if one only maintains a single primary checking account that is also interest bearing, can it be targeted by 3rd party collection firms.

[Brian_Earl_Spilner]

When a creditor receives a judgement they can use post-judgement discovery or discovery in aid of execution to be granted the means to locate where your assets are held. Your money isn't safe anywhere. You need to go after the creditor for violation of the FDCPA. You also need to get the judgement rescinded.

[EAJuggalo]

I think you're missing a couple of steps in there.  When was the judgement placed against you?  Was the suit brought within the SOL?  Once the suit is brought and a judgement obtained that throws the SOL out the window.  How long the enforcability window lasts varies by state, but most of them can be renewed.

From my own experience, I was sued by CapOne many years ago, a default judgement was entered against me.  The law firm seeking to collect sent garnishment writs to the four largest banks in my city, including the one that you mentioned, when they found the one I had an account with they attempted to garnish the account.  I got it all back due to how poor I was.  I found out later they tried again with the same banks, but this time I didn't have an account with any of them.  Eventually they got paid through wage garnishment when my credit reports listed where I was working.  Fast forward 10 years, my wife and I applied for a mortgage last year, turns out she had been sued and a default judgement entered against her at about the same time, but since it was just before we got married her name changed and it never followed her.  Now we are waiting a year from the time we paid it until we can get a mortgage.

[jmw1]

How old is the judgment?  How was service of process completed by the plaintiff? If it's been a year or more, it will be difficult to get the judgment set aside. You'll probably need to file (and pay fees) for a motion to set aside the default and go to a hearing at that court unless you are allowed to use Zoom or if it is a tenative ruling. If you cannot get the judgment set aside, the debt being time barred doesn't matter once it's reduced to a judgment. In the meantime, money at any bank, credit union, or other financial institution is subject to being levied by the creditor with no notice. There are lots of ways for creditors to find out where you bank and you can't stop them so your money is not safe at all no matter what state your bank is in. Only cash in your house or an offline crypto wallet (USB drive) is safe to store money. They can also garnish your wages. The only ways to "block" this is by paying the judgment, having the judgment set aside by a judge, or file bankruptcy. 

[jmw1]

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@EAJuggalo wrote:

  Fast forward 10 years, my wife and I applied for a mortgage last year, turns out she had been sued and a default judgement entered against her at about the same time, but since it was just before we got married her name changed and it never followed her.  Now we are waiting a year from the time we paid it until we can get a mortgage.

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Why do you need to wait a year?  There are low overlay lenders like Carrington that won't care as long as you pay it off before or at closing or have a minimum of 3 on-time payments on the judgment. If the judgment tanked your credit score so you can't qualify, that's different. 

[EAJuggalo]

@jmw1 The specific mortgage program that we are using statutorily requires one year between the payment of any judgements and the issuance of the loan.