Can Credit Card Companies Attach My Wages?

In most states, credit card companies can attach wages with a court order. Federal and state laws limit garnishment amounts for credit card debt and when the laws conflict, the rule benefiting the debtor generally applies. Wage attachment continues until debts are paid or until the debtor is unemployed. Neglecting to reply to a court summons for wage garnishment may result in a default judgment against you.

Facts

Some states limit wage garnishment for consumer debt, while Texas, South Carolina, North Carolina and Pennsylvania prohibit the practice. Excluding government and child or spousal support debt, federal and state laws totally exempt some forms of income from garnishment. Incomes exempt from garnishment for credit card debt include Social Security benefits, public assistance payments, some retirement funds and most other government aid.

Process

Excluding some government debt, creditors must obtain a court order to attach wages. Once a wage garnishment judgment is established, employers receive a copy of the order and remove funds from an employee's wages before issuing a paycheck. Employers cannot fire an employee based on one garnishment order. Federal law does not protect employment for multiple garnishments, but state laws may prohibit termination due to multiple garnishments.

Amounts

Federal law limits garnishment for credit card debt to 25 percent of a person's pay-period earnings or the amount of a person's disposable earnings that is more than 30 times the federal minimum wage, or whichever is less. States may have alternative garnishment limits. When laws conflict, the smallest garnishment rule applies. In cases of multiple garnishments for credit card debts, employers withhold wages in the order judgments are received. Regardless of the number of garnishments, the total amount withheld cannot exceed state or federal limits per paycheck.

Concerns

In addition to garnishing wages, creditors may levy bank accounts when permitted by state law. The process for bank levies is similar to wage garnishment in that a creditor files a claim with the court and the consumer's bank receives a copy of the order. Bank levies result in a temporary "freezing" of bank accounts and the withdrawal of funds to repay the debt. Income exemptions for government-assistance payments apply to funds in bank accounts and consumers may claim these exemptions to prevent a levy.