Credit Card Debt as Quick Road to Wage Garnishment

by John_S on October 30, 2011

If you ignore debts, they can take a bite out of your bank account or paycheck. Garnishment, the last effort of creditors at debt collection, is especially painful as it affects your ability to provide for your family, fill the gas tank, and pay the bills.

Credit card debt is a type of unsecured debt, true. No one will show up at your doorstep to hand a foreclosure notice or repossess your assets. However, creditors have other ways of getting their money back, and they will surely make your life miserable.

Credit card debt should not be seen as a quick road to garnishment only. For example, creditors will make it harder for debtors to get a promotion or even a job. Potential employers check your credit report and a negative mark on it will make you a less attractive employee. Landlords also run a check on your credit report, and bad credit will keep you from getting the house/ apartment you want. You won’t be able to rent a good place to impress a prospective girlfriend. And this is not the end of it. If you are knee deep in debt, your account is to be turned to professional debt buyers, lawyers, or collectors (Bankrate). You will be charged fees, and interest will accrue. All this may ruin an otherwise nice day … or month.

Then, there is this garnishment thing. Garnishment is a form of legal, court-authorized remedy, and a last-resort collection tool, explains ACA International’s legislative director of state government affairs David Cherner. Garnishment is normally initiated if money is owed and through a court order. Credit card issuers are required to give lenders enough time before initiating legal action. Creditors normally do this as they prefer not to file a lawsuit and avoid hassle. However, options are quite limited when judgment has been rendered, explains Gail Cunningham from the National Foundation for Credit Counseling.

What can debtors do in this situation? If you receive a notice that threatens legal action, it is reasonable to contact an attorney and discuss your option, before you face garnishment and lawsuits, notes lawyer with Rosenthal and Mintz Joseph Rosenthal. Then, once the situation escalates, your only recourse as a consumer is to either file bankruptcy or make a deal with the creditor. If none of these happens, collection procedures will take place following judgment (Credit Cards). Debtors may also contact a legitimate credit counseling company and seek help. Debt has to be addressed and living expenses reassessed. Finally, it is important to note that garnishment may take place irrespective of other debt issues. In fact, it may complicate the consumer’s other debt issues. A credit counseling company may negotiate a payment arrangement with more favorable terms on behalf of the debtor. However, the situation changes when debt becomes garnished. Then neither the counseling agency nor the consumer has any latitude, Cunningham explains. This arrangement has been set by the court (Fox Business).

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