Because credit cards carry fees and high interest rates in the event of late payment, it is relatively easy to rack up a large amount of debt. Credit card companies generally have the right to sue for recovery of the money charged against a card. However, the company must file the lawsuit before the state's statute of limitations runs out. If the lawsuit is filed, garnishment may be an option.
Credit Card Debt
A credit card company is allowed to sue for the recovery of a debt that stems from the use of a credit card. Generally, these lawsuits will be based on the fact that the borrower breached his credit card contract when he took out an unsecured loan from the company and didn't pay it back. This lawsuit must be filed in a civil court located in the state in which the borrower lives.
Statute of Limitations
While a debt stemming from a credit card has no statute of limitations on its collection, there is a statute of limitations on how long a company can file a lawsuit against the borrower for the debt. This length of time varies from state to state. If a credit card company does not file a lawsuit, then it will not be allowed to garnish the debtor's wages to collect on the debt.
Garnishment
Garnishment is only available in certain instances. First, the credit card company will have had to win its case against the debtor in court and been awarded damages. At this point, the debtor will be given a chance to pay. If the debtor still will not pay and, under state law, he is eligible for garnishment, then the credit card company can petition the judge to have the debtor's salary garnished.
Considerations
So, a person can have his salary garnished if the credit card company filed a lawsuit against him before the state statute of limitations expired, he refuses to pay, and he is eligible for garnishment. There are many individuals, particularly low-income individuals, who are exempt from garnishment, because they meet certain rules set by the state. In addition, not all states allow garnishment for the collection of private debts.
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