If I agreed to let a debt agency use “post-dated” electronic check debits from my bank account, how can I stop legall stop these debits?

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If I agreed to let a debt agency use “post-dated” electronic check debits from my bank account, how can I stop legall stop these debits?

I was told by a legal source to stop payment on the recurring debits. I am concened about the legal action that can be taken by the collector. I am behind on many other debts and have 2 judgements against me as well as a pending judgment. The same source told me to stop paying the afore mentioned creditor and focus on paying the judgments first. Is this sound legal advice?

Asked on June 4, 2012 under Bankruptcy Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you agreed to allow the debt agency to debit your account, then while you can most likely stop the debits (it is your account, after all), you would be in breach of the agreement and can be sued for that breach--e.g. for all amounts still due and owing, and potentially for costs of collection or legal expenses, too.

Legally, there is no reason to favor judgments over other debts, assuming you concede that the other debts are valid (i.e. you are not disputing them). Practically, though, there is a reason to pay judgments first: if you do not pay a court judgment, the judgment creditor may be able to put a lien on your real property, execute on (have seized and sold) personal property, garnish wages, and/or levy on (take from a bank account)--that is, once there is a judgment, the creditor can enforce payment in a variety of unpleasant ways.

If you are deeply in debt, and especially if these are mostly or entirely unsecured debts, like credit card bills or medical bills, and not secured debts, like a mortgage, HELOC, or auto financing, you may wish to consider bankruptcy as an option. You should consult with a bankruptcy attorney about whether bankruptcy (and what kind of bankruptcy; e.g. chapter 7 or chapter 13) would held you.


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