We all buy insurance to protect us from life’s problems and unexpected events that can throw your plans into disarray. One type insurance is accidental disability insurance. This insurance protects you if you are injured and unable to work. This income stream will often help you get by until you get back to work.
BLACKOUT PERIODS AND WHAT THEY DO WHEN YOU BUY ACCIDENTAL DISABILITY INSURANCE
One of the characteristics of this type insurance is that you are not able to start drawing money from this insurance for a period of time. This is commonly referred to as a blackout period and this period is the amount of time you must be unable to work before the insurance company will begin to pay. Of course, the longer the blackout period, the lower the monthly premium you have to pay.
This actually makes complete sense as you are much more likely to be out of work for two weeks with some injury than out of work for three months with an injury. Insurance companies want to make money and they cannot make money if they are paying out money all the time.
With the blackout period, you often will suffer some financial stress before the money starts coming from the insurance company. By the time your money begins, you may have creditors calling you and sending you letters threatening you with all types of legal action. Creditors will tell you anything to try and get you to pay money to them.
SEIZING MONEY FROM YOUR CHECKING OR SAVINGS ACCOUNTS
It is not as simple as a creditor or bill collector will tell you to seize or freeze your bank accounts unless the creditor is also the bank. If the creditor is not the same as the bank where you keep your money, then the creditor must first sue you and obtain a judgment before it can even try to seize you bank account. When you are sued, you have 30 days to respond to the lawsuit before a judgment can even be entered against you.
IF THE ACCOUNT HAS IN IT ONLY MONEY FROM DISABILITY INSURANCE, THE CREDITOR WILL NOT BE ABLE TO FREEZE AND TAKE THE MONEY
South Carolina Law, Section 38-63-40(D) protects the money you receive from Disability Insurance. This applies whether you are facing a collection action pursuant to South Carolina or are considering filing a bankruptcy case. No creditor or bankruptcy trustee can seize the money and take it to satisfy a debt owed to a creditor. Do not be afraid of the threats of a creditor who says that the creditor does not care what the law says. Sometimes a creditor will claim to not be subject to this law if the creditor is located in another state. This can, in fact, sometimes occur, but, this is very rare. Contacting an attorney who is familiar with this area of the law such as myself is something that you should do before you agree to pay the creditor anything.
Threats to take action against protected funds are actually against the law. You should contact an attorney to discuss if you have a cause of action or lawsuit against the creditor for threatening to ignore the law.
Remember, you will need the name of the creditor, the name of the collector, the date and time of the call and, if possible, a phone number or address that you can use to locate the person calling you. If the creditor or debt collector fails to give you a phone number and name, HANG UP. All legitimate creditors or debt collectors will give you this information.
MOVE YOUR MONEY TO A BANK THAT YOU OWE NO MONEY
If you owe a bank or credit union money that you cannot pay, move your money at once. Banks and credit unions can exercise the right of offset when you are just behind on your payments. The bank or credit union does not have to first obtain a judgment against you before it freezes and then exercises the right of set-off against your money. Your friendly smiling banker has a boss that will make him or her do this even if you think you are friends. The fact is, your banker has a job to do and he or she will do it.