Ask The Get Out of Debt Experts Wage Garnishment Related

I’ve Heard if I’m Behind on My Credit Card Account I’m More Likely to Get a Pay Garnishment. – Kat

“Dear Steve,

I have been following stories on debt lawsuits (unsecured credit card debt) and especially like this one NYT wrote here.

One of the 200+ comments that followed mentioned something about since the new CitiBank president entered the picture, the objective is to sue all debt defaulters.

How do you know when you’re a target for a debt lawsuit? Aside of the obvious, which is ignoring debt collectors, does a larger profile exist? Such as low income (not likely knowledgeable on credit rights), being a CitiBank customer or owing a certain amount?

Kat”

Dear Kat,

Taking people to court for a creditor is a good deal. Once they win their case they can get the legal system to do the collecting for them. And if the debtor does not pay then the creditor can continue to charge interest on the unpaid debt for years.

Most consumers never offer a defense, and creditors win their lawsuits without having to offer proof of the debts, much less justify to a judge the huge interest charges and penalties they often tack on.

After winning, creditors can secure a court order to seize part of the debtor’s paycheck or the funds in a bank account, a procedure called garnishment. No national statistics are kept, but the pay seizures are rising fast in some areas — up 121 percent in the Phoenix area since 2005, and 55 percent in the Atlanta area since 2004. In Cleveland, garnishments jumped 30 percent between 2008 and 2009 alone. – Source

How do you know if you are a target? If you are at least 60 days behind and have made a payment arrangement that is satisfactory to you and your creditor, you’re a target.

It’s a very difficult issue to get away from. The creditor will produce a legal agreement that the debtor entered into and the defense of not having the money to pay is not a ‘get out of jail free card.’

READ  Can the Collection Agency Garnish My Unemployment? - Andrea

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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