_Can Credit Card Companies Garnish Wages
Can Credit Card Companies Garnish your wages
The answer to the question, “Can Credit Cards Companies Garnish Your Wages” is a resounding “Yes.” By law, if you are sufficiently delinquent on a credit card that has been charged off, or turned over to a collection agency–if the agency cannot persuade you to pay the bill, the creditor has the authority to file garnishment papers with the court in your town. If the judge awards the garnishment, a process server will serve papers on your employer,demanding that so much money be taken out of your wages every paycheck, until the debt is paid in full.
Amounts Regulated By Federal Law
According to the Consumer Credit Protection Act, credit card companies can only garnish your wages so much. A creditor can only take 25 percent of your disposable income in excess of $290. This does vary by state and you need to check the statute of limitation for your particular state. Also, any amount that is larger than 30 times the federal minimum wage–which is $7.25 per hour as of 2012 can be garnished. By law, however, credit card companies can only go after the smaller of those two possible amounts. Also, in answering the question, “Can Credit Companies Garnish Your Wages,” the answer is not only yes concerning wages earned at work, but also retirement and pension benefits as well.
What is Disposable Income?
According to financial expert LaToya Irby, disposable income may include the money you’ve grossed in a given week minus federal, state, or local taxes. Unemployment income also qualifies under this rule. However, medical and other types of insurance don’t qualify as exempt when figuring disposable income. Thus, if your employer already is taking insurance money out of your check, and you are hit with a garnishment, you could end up with a check too small to even pay rent on paydays.
What Can I Do?
The answer to this question depends on how far in the collection process you are. As credit expert Herschel Bentley points out, if you are in collections but not under judgment yet, you may negotiate with the credit card company (or the credit agency representing it), telling them that you can pay a certain amount, say $50, per month. Stick to your pledge; don’t be pressured into promising more. The goal of collection agencies is to get you to pay the largest amount possible. Promise the $50, and then no more. Don’t become entrapped by your words. Once you’ve made the agreement, keep it. If your job situation changes, communicate that fact to them.
However, if a lawsuit has been filed, the answer to the question, “Can credit card companies garnish my wages” is an even stronger “Yes.” If you are in this situation, you probably should consider bankruptcy as an option. Filing for bankruptcy, although quite costly, results in an automatic stay from the day your papers are officially filed. What an automatic stay does is end the garnishment. What’s more, it is illegal for creditors to even contact you or otherwise harass you at all from that point onward. Whether you file for Chapter 7, a release of all possible debts, or Chapter 13, which involves a repayment plan– the automatic stay stays in effect pending the bankruptcy judge’s decision regarding your case.
Consequences
According to the law, although an employer doesn’t have the right to fire you over one garnishment, he can discharge you if you get another one sent his way. Garnishment papers are very costly and time consuming, and they do not place you in a favorable light as far as the employer’s opinion of you is concerned.
Aside from that, not only can credit companies garnish your wages, they can report you to the three major credit bureaus–and, as Ossenfort points out, your credit score could end up going south. That would make it difficult to buy a home, a car, or even get a job.
Thus, if you don’t think you can keep a credit card current, don’t apply for them. They are legal and binding. If you default on the agreement, credit card companies will be able to garnish your wages.
If you’re worried about your your wages getting garnish you need to click the link below to gain access to the most coveted information regarding your wages being garnished. This is information that is you do not know, could hurt you in the very near future! Go to debteliminationadvisory.com today.
Can Credit Card Companies Garnish your wages_