I had a bad debit with a credit card company and it went to third party collections. A judgement was issued against me. I was on unemployment benefits at the time of the judgement, as well as going to school full time. I did not have the means to pay the debt. My bank account was garnished in the amount of 3,931.79 which consisted of student loan money and unemployment benefits. I was to live off that money for the spring semester. I am aware of Section 8-80-130 C.R.S. and am hoping I can appeal the garnishment and have my funds returned as exempt property.
Is there any exemption for full time students and Federal Stafford Loan monies? How can I go about getting my money back?
Federal funds such as your student loan are typically exempt. You should contact the law firm executing the levy. Be prepared to document the source of all funds they levied. Any funds not exempt they will likely not refund. If you run into issues you should contact the court and file a petition for the return of exempt funds that were levied.
If you find yourself unprepared in any of your effort, contact the school and ask for their assistance (they have likely seen this before), or look for a low income legal aid office nearby and find out if you qualify for low to no cost legal help.
Moving forward you should try to make payment arrangements for the judgment debt. Small payments will not make much of a dent if interest is being added at the allowable rate in your state. Try to come up with a settlement where you document zero interest as long as the payments are made on time. You will need to get it in writing.
Until you have made satisfactory arrangements, keep only enough money in the account to leave it open. Continued levies require court approval, so they are mostly submitted by judgment creditors at the beginning, middle and end of month (when people are most likely to have been paid or have funds deposited to pay bills).
Let me know what happens by posting updates in the comment section below.
Best of Success to you in your efforts!
Michael Bovee has worked with financially challenged consumers for the past 17 years and is a recognized expert in his field. Michael founded Consumer Recovery Network (CRN) in 2006. CRN offers debt settlement services and educational resources nationwide. He has served as its president since 2006.
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