Credit card companies can access your bank account to withdraw money for a bad debt, but only after filing a lawsuit and gaining permission from a judge. You will be notified of that process every step of the way, giving you ample time to make payment arrangements or resolve the issue in some other way.
Bank Garnishment
Bank garnishment is the procedure credit card companies use to withdraw money from your bank account without your permission. Garnishment can be financially devastating, and you should do everything possible to avoid one. Some people file for bankruptcy to stop garnishment, although it can also be ended through negotiations with the credit card company.
Summons and Complaint
The garnishment process begins with the delivery of a summons and complaint. A summons is a paper document notifying you of a lawsuit. The lawsuit, called the complaint, is attached to the summons. The summons instructs you to appear before a judge or file a written response to the lawsuit. The lawsuit alleges that you opened a credit card account but stopped paying, resulting in a balance that is still owed. The summons and complaint are generally hand-delivered by a courier to your home or place of employment, but are sent by certified mail in some states or simply left at your residence.
Default Judgment
Responding to the lawsuit is critical. A judge will rule in favor of the credit card company if you do not respond to the lawsuit. His decision is called a default judgment, and allows the credit card company to request access to your bank account through garnishment. The court will allow some time for you to be notified about the judgment and work out a payment arrangement. However, garnishment is allowed if you fail to contact the court or reach a settlement with the card company.
Garnishment Process
It's up to the credit card company to find your banking information once the judge signs the garnishment order. This is generally easy, as the credit card company reviews your payment history to find your banking information from previous payments by check. The card company then provides the bank with the court order requesting garnishment. By law, the bank must comply and grant access to your account. The card company is then free to remove money from your account, multiple times if necessary, until the balance owed is paid.
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