Can Credit Companies Garnish Your Wages?

If you’ve been letting your credit card debt rise beyond your means in which to pay, you might ask whether or not credit card companies may garnish your wages? They can, but their ability to do so is limited. First, the company would need to sue you. They would then need to win. Even then, the company may not garnish wages unless a judge decides that’s an appropriate method of payment.

In the event that you’re served with legal payments, then find an attorney immediately. You should never ignore a lawsuit. If you fail to show in court, the plaintiff (such as a credit card company) may then receive in his or her favor a default judgment. A default judgment would mean you now owe the amount for which the creditor sued. The courts then decide how to best to retrieve this money, and that may well mean garnishing your wages. In such an instance, the court would contact your employers and order them to withhold a portion of your pay. Since July 24, 2009, that amount would be twenty-five percent of your disposable income if it happens to be greater than two hundred and ninety dollars, or any amount that’s thirty times the federal minimum wage, whichever amount is lower.

In the event that you receive notices from your employer that a credit card company, or anyone, is garnishing your wages, and you haven’t received papers, then also immediately see a lawyer. In this case, the creditor has not followed the correct procedures and it’s possible to have the judgment overturned. The best way, of course, to avoid a lawsuit and going through the burden of having your wages garnished, is to pay off debts before they’re extremely delinquent. In any case, you want to try and avoid a lawsuit, because once a judgment is entered onto your credit report, it remains from the date of filing for seven years.