Credit Card Debt Garnishment - Could My Wages Be Garnished If My Creditors Take Me to Court?

Credit Card Debt Garnishment - Could My Wages Be Garnished If My Creditors Take Me to Court

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In order to secure unsecured debt, the credit card companies use wage garnishment as their last resort to get money from their creditors in a legal manner. The credit card company needs to get a civil judgment from the court against the debtor, before the debtor's wages can be garnished. Every state has its own laws for these procedures and also if the wages can be garnished at all.

Private creditors, like the credit card companies, are restricted by the federal law to garnish only a certain percentage of a debtor's wages. According to title III of the federal Consumer Credit Protection Act garnishing 75 percent of an employee's weekly disposable earnings or 30 times the federal minimum hourly wage, whichever amount is greater is not allowed.

A credit card company is allowed to sue a debtor in any of the 50 states but it is not necessary that state law will permit private creditors to use wage garnishment for collection. Most of the states' laws conform to Title III, however some states permit debtors to claim about 85 percent of exempt earnings. States like Texas and Pennsylvania prohibit wage garnishment by credit card companies.

Each state permitting wage garnishment follows the same. The order of garnishment is sent to the debtor as well as his employer. The employer then has to deduct the said amount of the debtor's earnings and pays it to the creditor. In some states, garnishment orders continue until the debt is paid. However, in other states garnishment orders expire after a certain period of time, and the credit card company must get another order from the court. Some states like New York allow the debtor a grace period of 30 days before the employer is informed of the wage garnishment. This is done in order to encourage the debtor to pay off his debt.

Debt settlement is a legitimate alternative to filing bankruptcy. If consumers are experiencing a financial hardship and have at least $10k in unsecured debt then debt settlement can be a legitimate way to eliminate up to 70% of that balance.

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