Ongoing services, such as utilities, telephone service, or health insurance coverage, must be paid or they will lose future service or coverage.
Items purchased on credit or pledged as security on a loan can usually be taken from if payments cannot be made.
But be aware: even after a creditor has taken one of the above steps, it may still have the right to recover money. For example, although a bank has repossessed a car, if its resale value is less than what is owed, there may be liability for the difference.
20. What property is protected?
Under federal law there are certain things that cannot be taken, regardless of how much is owed and regardless of whether or not there is a bankruptcy. The most important of these are:
Social Security payments, annuity income (this should cover private disability insurance payments), pension income, worker's compensation and unemployment compensation (There are some exceptions for child support, alimony, and taxes);
Up to $15,000 equity in a home; The proceeds and avails from a life insurance policy; Necessary household appliances and furnishings; Necessary personal items and clothing; Necessary medical equipment; and
If working, any tools needed for the job, and an automobile if it is necessary for the job (merely going back and forth to work does not qualify). If all property and income is exempt, then they should notify creditors. Once they know there is nothing to take, they will usually write off the debt or at least stop collection activity.
21. What about the contents of my safe deposit box? Does FDIC insurance cover safe deposit boxes?
Deposit insurance does not cover safe deposit contents. Most safe deposit boxes are held in the bank’s vault, which are fireproof and waterproof. If possible, contact the branch or office where your box was located to determine the condition of your box.
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