If you ignore your credit card debt for too long, it can lead to your wages being garnished and your bank accounts being frozen. Garnishment is a last-ditch effort that debt collectors use to hit debtors where it hurts most by affecting their ability to pay their bills, fill their car with gas, and feed their families.
If you are facing large amounts of credit card debt that you can't afford to pay, the best plan of action is to act early and speak with your creditors about reaching some sort of payment arrangement. If they agree to a repayment plan, make sure you stick to it. If you let your debt go unpaid and continue to ignore them, the courts might intervene and issue a judgment that requires your employer to "garnish" or withhold a portion of your wages or bank accounts to pay back the debts you owe.
Collecting Your Debts
Garnishment is supposed to be a last resort legal remedy to collect debt. In fact, most states only allow a court to initiate the garnishment process, and only if a judgment for monies owed has been entered.
Often, we get clients who are ashamed when they find out their employer will now know about their financial situation because their wages are being garnished. Employers generally have to tell their employees about the amount they withhold from their wages. Under the Consumer Credit Protection Act, employers are legally prohibited from firing an employee whose wages are garnished, but this protection is eliminated after the employee gets a second and third such judgment.
Credit Card Debt & Garnished Wages
Once your credit card account (or any of your other debt) goes into default, and the creditor decides it can’t collect, it can choose to sell your debt off to a debt collection company.
If the credit card or debt collection company fails to recover the debt you owe, then it can file a lawsuit against you in an effort to recover its losses. If the ruling in the lawsuit goes against you, the court can issue a judgment to garnish your property, bank accounts, or wages.
Being threatened with legal action is a serious matter that requires assistance from an experienced attorney. If you begin receiving threats about legal action being taken against you, it is important to talk to a lawyer before the situation escalates into a lawsuit and you face wage garnishment.
After being issued an order for wage garnishment, your only recourse is to ask the court to adjust the amount of the garnishment. This can only be done if it significantly impacts your ability to support yourself and your family. This is why it is crucial to have skilled legal representation capable of helping you negotiate your wage garnishment case.
How Garnishment Works
When your wages are garnished, money is deducted directly from your paycheck and sent to the creditor overseeing your debt. This type of debt collection is generally seen in delinquent tax situations and back-owed child support. However, credit card debt is not immune to this process.
When other assets like your property are garnished, a lien is associated to the property for the judgment amount. When your property is sold, the money from the sale is distributed to your creditors.
Speak to a Debt Collection Lawyer Today
Our skilled attorneys are prepared to help you get ahead of your past due debts today. Don’t bury your head in the sand when you start to receive notices about your debts. Reach out to us today before you end up in a financial mess that can’t be reversed.
Call (312) 313-1613 to set up your free case evaluation with our experienced team of Chicago debt collection attorneys.