If you ignore your delinquent debts, your creditors may sue you rather than continue sending demands for payment. Although not legal in all states, a successful lawsuit and court judgment often give creditors the right to garnish your paychecks or bank accounts.
Significance
Court judgments enable creditors to obtain the writ of execution necessary to enforce a garnishment. Judgment statutes of limitations vary by state, but garnishment is only legal while the original court judgment is still valid. Creditors may extend the time period allowed for garnishment by renewing the judgment before it expires.
Considerations
In some cases, the statute of limitations for court-enforced debt recovery expires before the creditor can obtain the legal judgment it needs to begin the garnishment process. If a creditor attempts to sue you past the deadline, you still need to go to court to point out that the statute of limitations has lapsed.
Government
Garnishments by the federal government do not follow the same set of rules as garnishments from conventional creditors. The U.S. government does not need a court judgment to garnish bank accounts and wages, nor is it subject to a statute of limitations for debt recovery. Because no judgment is necessary, garnishment can continue until the government recovers the full amount you owe.
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