If a credit card debt becomes very delinquent, your credit card company, or the collection agency that bought the debt, may take you to court. If they win their lawsuit, they then can use the judgment to collect the debt, which may include asset seizure and wage garnishment.
Asset Seizure and Garnishment
State laws vary on what property and income a creditor can take to pay off a court judgment. In many states, the creditor can garnish up to 25 percent of your wages and seize money in your bank and investment accounts. It may also be able to seize other assets of value, such as cars, jewelry, boats and property.
Property Lien
If you own a home, it may be protected under your state's homestead exemption, which means that a creditor cannot force you to sell it or seize it outright. The creditor can get a lien on your property, however, which means that if you sold or refinanced your home, it would have a claim on the proceeds.
Credit Report
Judgments are a matter of public record, and credit reporting companies regularly add this information to your credit report. A judgment can remain on your report for seven years.
Statute of Limitations
If a creditor gets a judgment against you, they will likely have a long time to try and get their money. In many states, the statute of limitations on collecting a judgment is much longer than it is for collecting other debts. In fact, in some states, it is possible to renew the statute of limitations on judgment collection.
0 comments:
Post a Comment