Can I open a bank account if I owe money to debt collectors?

[ИATAS]

Yeah it's no problem.

The only issue that could potentially come up is if they try to garnish your wages. Look into your state laws on the maximum they can garnish. Also there are national laws as well in place, I don't think they can take more than 25% off the top of my head. As far as banks go they can't touch that money (unless it's the IRS which medical bills certainly are not).

[Spray_resistant]

Yeah it's no problem.

The only issue that could potentially come up is if they try to garnish your wages. Look into your state laws on the maximum they can garnish. Also there are national laws as well in place, I don't think they can take more than 25% off the top of my head. As far as banks go they can't touch that money (unless it's the IRS which medical bills certainly are not).

Its 15%, happened to me with a fed student loan I just neglected to pay because IDC but yeah that is only govt agencies that can just forcibly take your money.

[dante_1]

Looked up the garnishing of wages, and freezing accounts issue. They have to sue you, and take you to court first, and you'd receive a letter to know it's about to happen. But they'd have to find out you have a bank account first. This is a collection agency, I doubt they'd know that, unless you were a dumb ass, and told them your account number.

And thanks for the replies, I was scared I'd have to keep cash in the house or get one of those cash cards that only limit it to $2k.

[-Kev-]

You can open up a checking account with bad credit, I did it. I won't say what my scores were but they were really bad. Just recently I paid off everything I owed and now i'm rebuilding my credit with a secured credit card. I went up 50 points in 1 month, i'm now in the 600s so at least I have a pulse.

My advice is call the collections company and speak to them about making a settlement as soon as you feel you can pay anything, or just ask them if they can make a payment plan for you since $50k is an astronomical amount of debt to have. Now, a settlement will go as a flag on your report, it's not as good as paying in full. You are a risky borrower because you paid off less than what you owed, and creditors/lenders will not like this. But it's better than not paying anything at all. Debt collectors are human after all so if you speak to them about your situation and ask for help, they'll tell you what you can do.

[dante_1]

You can open up a checking account with bad credit, I did it. I won't say what my scores were but they were really bad. Just recently I paid off everything I owed and now i'm rebuilding my credit with a secured credit card. I went up 50 points in 1 month, i'm now in the 600s so at least I have a pulse.

My advice is call the collections company and speak to them about making a settlement as soon as you feel you can pay anything, or just ask them if they can make a payment plan for you since $50k is an astronomical amount of debt to have. Now, a settlement will go as a flag on your report, it's not as good as paying in full. You are a risky borrower because you paid off less than what you owed, and creditors/lenders will not like this. But it's better than not paying anything at all. Debt collectors are human after all so if you speak to them about your situation and ask for help, they'll tell you what you can do.

Great advice. I think it's even more than 50k. That was a rough estimate. Don't have every single hospital bill in front of me, but it came up to around 50k +.

[deliveryman]

As someone who works at a bank:

I know banking laws are very different between the US and Canada, but I'm pretty sure they're the same in this regard.

It is illegal for a bank to refuse to open a checking account based entirely on your credit history. It is your legal right to have basic access to money. However if you owe money to that particular bank, they reserve the right to close your account obviously. A bank can only refuse to open account if:

1. The bank has good reason to believe it will be used for fraudulent purposes
2. You do not meet government identification requirements.
3. You had previous accounts with them that are in bad standing.

And no, debt collection companies cannot touch your bank account. No one can, except for the bank itself and the government.

[dante_1]

As someone who works at a bank:

I know banking laws are very different between the US and Canada, but I'm pretty sure they're the same in this regard.

It is illegal for a bank to refuse to open a checking account based entirely on your credit history. It is your legal right to have basic access to money. However if you owe money to that particular bank, they reserve the right to close your account obviously. A bank can only refuse to open account if:

1. The bank has good reason to believe it will be used for fraudulent purposes
2. You do not meet government identification requirements.
3. You had previous accounts with them that are in bad standing.

And no, debt collection companies cannot touch your bank account. No one can, except for the bank itself and the government.

Awesome to hear this. I was scared I'd stack up some money, and all of a sudden my moneys gone, or it's frozen. Was paranoid about that too.

Awesome info.