Credit cards can be useful yet dangerous at the same time. Often they are much needed tools, used to pay the ever increasing bills related to regular household expenditures like $4 a gallon gas and groceries. However, credit card debt can add up quickly, and with the average credit card interest rate at more than 16 percent, many consumers find themselves no longer able to pay off their debts. Indeed, many find that paying even the minimum monthly balance is simply not possible.
Once an individual is no longer able to pay his or her monthly statement, credit card companies use a variety of techniques to gather the money owed to them. Often, this starts with reminder letters or phone calls that are friendly in nature. Eventually, they may become combative and even frightening. If an individual chooses to avoid these collections calls, they may begin calling neighbors, friends, and employers. When the individual is reached by phone, debt collectors can threaten to use lawsuits and wage garnishment to receive payment. With so many unscrupulous techniques attributed to them, it can be difficult to trust credit card companies, leaving the debtor either overly cautious or overly aloof when faced with these threats.
Can Credit Card Companies Garnish Wages?
The simple answer to the question of, “Can credit card companies garnish wages?” is yes, credit card companies can garnish your wages, but the actual process is much more complex. To understand the reason why they are allowed to do so, one must first understand what wage garnishment is and why it should be avoided at all costs.
What Is Wage Garnishment?
Wage garnishment is the process by which an individual’s paycheck is reduced in order to directly reimburse the entity to whom he or she owes money. Wage garnishment, in most cases, can only occur after the debtor has been sued and the court issues an order. The amount of allowable garnishment varies from state-to-state. As those who are already struggling financially know, any decrease in payment can cause severe harm.
Wage garnishment not only means that a person will have less money in his or her paycheck, it is also a process that damages credit as well as reputation. Wage garnishment stays on an individual’s credit report for seven years, which can adversely affect the ability to open a new bank account, apply for future loans, be offered future jobs, or even be approved for rental cars or cell phone plans. Because wage garnishment is handled through the employer, it is also impossible to keep this financial matter a private one. Though an employee cannot be fired for having a wage garnishment, it could affect personal relationships with supervisors and co-workers.
Who Can Garnish Wages?
The question regarding who can garnish wages varies from state to state. Those who owe money on taxes, child support, or student loans may see their wages garnished throughout the US. In all states except for Texas, Pennsylvania, North Carolina and South Carolina, credit card companies can be paid through garnished wages as well.
How To Stop Wage Garnishment
Credit card companies cannot garnish wages without a court order. Therefore, it is important to take any threat or notification of a lawsuit seriously. Sometimes, individuals choose to ignore credit card companies, hoping that they will simply write off the debt and move on to other matters. This is rarely the case, and when the eventual lawsuit does happen, it is vital that the debtor appear in court. Otherwise, the entity that filed the suit can ask, and will often receive, a default judgment in which the court will decide to garnish your paycheck and how much will be taken out. Even for those who do show up in court, the odds are not in their favor. Most courts will require a debtor to pay back the money they owe, regardless of any financial tailspin that may occur.
The best way to stop wage garnishment is to settle the debt before it can be taken to court.
Often, the best choice is to work with a debt negotiation and settlement service to help you out of the debt you have accrued. A company that can consolidate debts through settlement can help you end the cycle of non-payment and get you back on your feet. For a free debt analysis, call us or fill out our simple form with no obligation. A highly-trained debt negotiation expert will study your case and provide you with a free debt analysis. You can get the help you need and deserve. Call now or fill out the form today if you are in debt and are concerned about the possibility of wage garnishment.