January 9, 2009
-
News: Process of Garnishment Over CC Debt.
What actually goes on during the grueling process of effecting a legal wage garnishment over a credit card debt (or other similar situations)? It all starts with a serious credit card debt going into default. Next, the credit card lender will attempt to still collect the debt – usually in a cordial non-threatening manner. Over time, however, the language starts to become stronger.
When the lender decides that negotiations aren't going anywhere (after 90 days or so), the bad credit card accounts are usually sold to a debt collection agency with the agreement that the agency can gain pennies on the dollar for any debts they can collect on. If the debt collection agency has no success at recovering any of the debt, then a decision is made as to the extent of further action. In the extreme cases where the credit card debt is large, legal action will be considered.
When a debtor starts receiving notices of ‘legal action', it would do well for that person to either initiate serious negations to avoid it or else secure a good attorney. If the debtor does neither and the debt is legitimate then, based on many factors, the lender may decide to take that extreme step that they hate to take – filing in the courts for legal garnishment of wages in order to recover the losses. If this path is taken, the credit card lender will be required to notified the debtor. If a mutual agreement is not reached and the lender should prevail in court, the debtor is basically faced with only a few options. Those are: Abide by the ruling, quit your job forever or file for Chapter 7 Bankruptcy.
There may be room, however, for some minor modifications to the original judgment. In some cases, the debtor may seek relief from the judge to reduce the rate of garnishment if the debtor finds some compassion in the judge presiding and can convince that judge that the hardship is too extreme for the debtor to bear. The rate of garnishment may be reduced in this case but, eventually, the entire credit card debt must be paid. One other exception is where the states' garnishment laws differ from federal law. In these cases, the debtor can claim the lesser of the demands.