can the irs seize money on a secured debit/credit card?

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can the irs seize money on a secured debit/credit card?

Asked on June 19, 2009 under Business Law, California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

A secured credit card is secured by money that the consumer deposits into a security account held by the lender.  The lender then issues a card, secured by the account.  The consumer can then use the card to charge up to the amount equal to that on deposit.  Since we are talking about a secured creditor, the IRS could not seize the money, at least for the amount of the outstanding debt.  They could however seize any unsecured amounts.  For example, if you had a credit card secured by a $500 deposit and you had charges totaling $300, than $200 of the account would be unsecured and the IRS could make claim against that.  Of course, your credit limit would be accordingly reduced by the amount seized. 

This is my general understanding, however, without reviewing the credit documents, I can't say for certain. 


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