# HELP! Credit card debt effecting NYSARC community trust ? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [January 22, 2015, 4:07pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583 "2015-01-22T16:07:38Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![fer308qv](https://avatars.discourse-cdn.com/v4/letter/f/f6c823/32.png) [@fer308qv](https://boards.straightdope.com/u/fer308qv)\ **Post date:** [January 22, 2015, 4:07pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/1 "2015-01-22T16:07:38Z")
I am legal guardian for my disabled sister. She has abused her credit cards (7) to the tune of $20k. problem is she cant payback the debt. I want to walk away from the debt to ruin her credit forcing her to live within her means. (pension and disability). I dont want her to be able to acquire any more cards. She is in the NYSARC community trust which entitles her to receive medicaid needed for her many health issues. Can the credit card companies snatch her checking account where her SS check is directly deposited? The monthly SS money is sent to the NYSARC trust. Im concerned they may be able to take that from her. She also has a small pension. Can They take that as well? ---
**Author:** ![Skywatcher](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skywatcher/32/254_2.png) [@Skywatcher](https://boards.straightdope.com/u/Skywatcher)\ **Post date:** [January 22, 2015, 4:13pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/2 "2015-01-22T16:13:11Z")
Reported to be moved to the proper forum. ---
**Author:** ![Colibri](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/colibri/32/1841_2.png) [@Colibri](https://boards.straightdope.com/u/Colibri)\ **Post date:** [January 22, 2015, 4:13pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/3 "2015-01-22T16:13:43Z")
Legal advice is best suited to IMHO. Moved from ATMB. Colibri ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [January 22, 2015, 4:23pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/4 "2015-01-22T16:23:35Z")
> [@fer308qv](#): > > Can the credit card companies snatch her checking account where her SS check is directly deposited? > > \ > > She also has a small pension. Can They take that as well? Your state laws may vary, but generally yes, they can if they sue and are awarded a judgement to do so. [http://yourbusiness.azcentral.com/recourse-credit-card-companies-collecting-defaulted-debt-4432.html](http://yourbusiness.azcentral.com/recourse-credit-card-companies-collecting-defaulted-debt-4432.html) ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [January 22, 2015, 4:29pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/5 "2015-01-22T16:29:47Z")
Can a legal guardian deliberately ruin someone’s credit and not be held legally responsible? ---
**Author:** ![vomit\_comet](https://avatars.discourse-cdn.com/v4/letter/v/73ab20/32.png) [@vomit\_comet](https://boards.straightdope.com/u/vomit_comet)\ **Post date:** [January 22, 2015, 5:12pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/6 "2015-01-22T17:12:17Z")
At this point, your best bet would be to cut up and cancel all the cards then call all the credit card companies and explain the situation and come up with an amount that you can pay each of them each month. ---
**Author:** ![simster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/simster/32/1047_2.png) [@simster](https://boards.straightdope.com/u/simster)\ **Post date:** [January 22, 2015, 5:52pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/7 "2015-01-22T17:52:10Z")
If you’re her legal gardian - you allowed this to happen. In any event - if the situation is as you say it is - check with a BK attorney - it will allow you to settle the debt along with resetting things such that you/she can’t do this again. (for a period of time, of course) ---
**Author:** ![fer308qv](https://avatars.discourse-cdn.com/v4/letter/f/f6c823/32.png) [@fer308qv](https://boards.straightdope.com/u/fer308qv)\ **Post date:** [January 22, 2015, 7:05pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/8 "2015-01-22T19:05:29Z")
BK atty? bankruptcy? ---
**Author:** ![simster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/simster/32/1047_2.png) [@simster](https://boards.straightdope.com/u/simster)\ **Post date:** [January 22, 2015, 7:06pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/9 "2015-01-22T19:06:15Z")
> [@fer308qv](#): > > BK atty? bankruptcy? yes. ---
**Author:** ![fer308qv](https://avatars.discourse-cdn.com/v4/letter/f/f6c823/32.png) [@fer308qv](https://boards.straightdope.com/u/fer308qv)\ **Post date:** [January 22, 2015, 7:20pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/10 "2015-01-22T19:20:37Z")
Thank you ---
**Author:** ![Carryon](https://avatars.discourse-cdn.com/v4/letter/c/9fc29f/32.png) [@Carryon](https://boards.straightdope.com/u/Carryon)\ **Post date:** [January 22, 2015, 7:49pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/11 "2015-01-22T19:49:01Z")
First, you can’t attach disability or social security payments, (some governmental agencies can though). So she’s safe there. Second, you can attach a bank account, but all states have an “exclusion” limit for such things. It’s usually a bank account between two and four thousand can’t be attached. Some states allow you to substitute a vehicle in place for the same valued amount. You must consult your state laws. Third, while a creditor can’t “attach” an account, all creditors can deduct amounts owed from accounts they own. For instance, if your sister has a bank about with Bank of America and owes a Visa issued by Bank of America, they can indeed take it out of her account without an attachment order. Bankruptcy is not advisable if your sister is basically judgement proof. The reason being is after bankruptcy you have to wait ten years to file again (the same type of bankruptcy). So if your sister were to file, clear all debt, then go into hospital and wind up with 100 grand in debt from that, the hospital would have ten years to get payment. Don’t bother with bankruptcy with people who are judgement proof. In seven years it will fall off her credit report. Though the debts are still owed, cc debts are unsecured and have statute of limitations. Most are three to five years, though some are much longer. I work for an NPO and I see this with our clients who have spent long streches in prison and most often come out with clean credit. The key here is to look at your state laws, because they can very, and once you are sure your sister is judgement proof, go from there. ---
**Author:** ![simster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/simster/32/1047_2.png) [@simster](https://boards.straightdope.com/u/simster)\ **Post date:** [January 22, 2015, 8:05pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/12 "2015-01-22T20:05:52Z")
> [@Carryon](#): > > The key here is to look at your state laws, because they can very, and once you are sure your sister is judgement proof, go from there. Which is why she should consult a BK attorney - they will be able to determine this stuff and assist with the decision. Initial consultations are generally free. Thinking you are ‘judgement proof’ does not prevent the judgement itself - which can have other affects. Note - I did not suggest blindly ‘filing bankruptcy’. ---
**Author:** ![fer308qv](https://avatars.discourse-cdn.com/v4/letter/f/f6c823/32.png) [@fer308qv](https://boards.straightdope.com/u/fer308qv)\ **Post date:** [January 23, 2015, 1:26am UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/13 "2015-01-23T01:26:03Z")
thank you greatly for this information ---
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [January 23, 2015, 1:43am UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/14 "2015-01-23T01:43:56Z")
> [@Carryon](#): > > Third, while a creditor can’t “attach” an account, all creditors can deduct amounts owed from accounts they own. For instance, if your sister has a bank about with Bank of America and owes a Visa issued by Bank of America, they can indeed take it out of her account without an attachment order. [15 U.S. Code § 1666h - Offset of cardholder’s indebtedness by issuer of credit card with funds deposited with issuer by cardholder; remedies of creditors under State law not affected](http://www.law.cornell.edu/uscode/text/15/1666h) > [@](#): > > a) Offset against consumer’s funds > A card issuer may not take any action to offset a cardholder’s indebtedness arising in connection with a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer unless— > (1) such action was previously authorized in writing by the cardholder in accordance with a credit plan whereby the cardholder agrees periodically to pay debts incurred in his open end credit account by permitting the card issuer periodically to deduct all or a portion of such debt from the cardholder’s deposit account, and > (2) such action with respect to any outstanding disputed amount not be taken by the card issuer upon request of the cardholder. > … [Federal Reserve Regulation Z: 12 CFR 226.12 - Special credit card provisions.](http://www.law.cornell.edu/cfr/text/12/226.12) > [@](#): > > (d) Offsets by card issuer prohibited. (1) A card issuer may not take any action, either before or after termination of credit card privileges, to offset a cardholder’s indebtedness arising from a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer. > (2) This paragraph does not alter or affect the right of a card issuer acting under state or federal law to do any of the following with regard to funds of a cardholder held on deposit with the card issuer if the same procedure is constitutionally available to creditors generally: Obtain or enforce a consensual security interest in the funds; attach or otherwise levy upon the funds; or obtain or enforce a court order relating to the funds. > (3) This paragraph does not prohibit a plan, if authorized in writing by the cardholder, under which the card issuer may periodically deduct all or part of the cardholder’s credit card debt from a deposit account held with the card issuer (subject to the limitations in § 226.13(d)(1)). ---
**Author:** ![Senegoid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senegoid/32/6606_2.png) [@Senegoid](https://boards.straightdope.com/u/Senegoid)\ **Post date:** [January 23, 2015, 9:11am UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/15 "2015-01-23T09:11:37Z")
The card-holder / account-holder has almost certainly already authorized all those actions that the laws says can only be done if the customer has authorized it. That kind of stuff may be (and in fact always is) written into the terms-and-conditions of the account that the customer agreed to when the account was first opened. If the customer hasn’t actually signed a document agreeing to this, he probably has agreed anyway. For example, credit cards typically come with a condition something like “By using this credit card to make a purchase, card-holder agrees to all the following terms and conditions: [insert many pages of fine print here]”. ---
**Author:** ![Senegoid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senegoid/32/6606_2.png) [@Senegoid](https://boards.straightdope.com/u/Senegoid)\ **Post date:** [January 23, 2015, 9:18am UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/16 "2015-01-23T09:18:04Z")
> [@Carryon](#): > > Third, while a creditor can’t “attach” an account, all creditors can deduct amounts owed from accounts they own. For instance, if your sister has a bank about with Bank of America and owes a Visa issued by Bank of America, they can indeed take it out of her account without an attachment order. This is a good reason why banks always pressure their customers, by means of lots of advertising (ETA: and various promotional benefits), to have as many of their accounts as possible all at the same bank. Not only do they simply want your business (as any business would), but they want to be able to get their hands on as many of your accounts as they can, so they can unilaterally settle any disputes on any account by simply helping themselves to your funds from any other account. For exactly the same reason, this is why banking customers should prefer to keep all their accounts at different banks. Once upon a time, I had a saving account, a checking account, a credit card account, and a retirement account, all of which I had deliberately opened at _different_ banks. Then, in the early 1990’s, Washington Mutual went on a sudden out-of-control acquisition spree and the next thing I knew, ALL of my accounts were WaMu accounts. Gradually, over the years as I had occasion to move accounts for one reason or another, I moved most of those to other banks. My last two WaMy accounts ceased to be WaMu accounts when WaMu self-destructed, and have since been Chase accounts. ---
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [January 23, 2015, 9:23am UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/17 "2015-01-23T09:23:47Z")
> [@Senegoid](#): > > The card-holder / account-holder has almost certainly already authorized all those actions that the laws says can only be done if the customer has authorized it. That kind of stuff may be (and in fact always is) written into the terms-and-conditions of the account that the customer agreed to when the account was first opened. > > If the customer hasn’t actually signed a document agreeing to this, he probably has agreed anyway. For example, credit cards typically come with a condition something like “By using this credit card to make a purchase, card-holder agrees to all the following terms and conditions: [insert many pages of fine print here]”. No. The Federal Reserve has explicitly ruled that such boilerplate language cannot override the prohibition on offsets. Any such agreements hidden in the application or terms and conditions are null and void. [From the Offical Staff Interpretaion of Regulation Z:](http://www.law.cornell.edu/cfr/text/12/part-226/appendix-SupplementI) > [@](#): > > i. The consumer must be aware that granting a security interest is a condition for the credit card account (or for more favorable account terms) and must specifically intend to grant a security interest in a deposit account. Indicia of the consumer’s awareness and intent include at least one of the following (or a substantially similar procedure that evidences the consumer’s awareness and intent): > A. Separate signature or initials on the agreement indicating that a security interest is being given. > B. Placement of the security agreement on a separate page, or otherwise separating the security interest provisions from other contract and disclosure provisions. > C. Reference to a specific amount of deposited funds or to a specific deposit account number. ---
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [January 23, 2015, 9:56am UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/18 "2015-01-23T09:56:25Z")
Let me add just one thing: The prohibition on offsets applies to consumer credit card debt only. It does not apply to auto loans, personal loans, home loans, etc. It does not apply to business accounts. So when you accept that Bank of America offer to pay you $500 to open a business credit card, you lose valuable consumer protections, including the prohibition on offsets. ---
**Author:** ![usedtobe](https://avatars.discourse-cdn.com/v4/letter/u/ec9cab/32.png) [@usedtobe](https://boards.straightdope.com/u/usedtobe)\ **Post date:** [January 23, 2015, 10:33am UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/19 "2015-01-23T10:33:51Z")
A chat with a bankruptcy attorney licensed and practicing in your jurisdiction is who who need to consult. Many BK attorneys will give you a 15-30 minute consultation free. I had the State of CA attempt to seize funds from a checking account. The only money in that account was SS Disability. They had to give it back. A pension is probably not protected. I was told by a lawyer that: Statute of Limitations on Credit Card debts is 4 years BUT: THE DEBT DOES NOT GO AWAY - all the SoL does is preclude use of the Courts to collect a debt. The debt remains. I suspect that, given the number of cross-referenced databases, the creditor just might come back to present a (legitimate) claim against the estate when the deadbeat dies. See a lawyer. I’m guessing the outcome will be that all cards are surrendered and a payment plan is worked out with each creditor. As stated, the bankruptcy card can be played only once every 10 years. Using it early is a bad idea. And ask the lawyer about your personal liability - as Guardian, can you be held responsible for her debts? ---
**Author:** ![fer308qv](https://avatars.discourse-cdn.com/v4/letter/f/f6c823/32.png) [@fer308qv](https://boards.straightdope.com/u/fer308qv)\ **Post date:** [January 23, 2015, 2:48pm UTC](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583/20 "2015-01-23T14:48:41Z")
interesting fact sheet I located…on the surface my sister seems protected [http://www.nyc.gov/html/dca/downloads/pdf/web\_debt\_collection\_fact\_sheet.pdf](http://www.nyc.gov/html/dca/downloads/pdf/web_debt_collection_fact_sheet.pdf) [Next page](https://boards.straightdope.com/t/help-credit-card-debt-effecting-nysarc-community-trust/710583.md?page=2)