Louisiana Laws on Credit Card Debt & Income Garnishments

Between Hurricane Katrina and the economic recession of 2008 and beyond, many Louisianans have found themselves in dire economic straits. In a worst case scenario, you can be sued by your credit card company and have your wages garnished after a judgment is made against you. With more than 1,200 complaints against collection agencies to the Federal Trade Commission in 2009 alone, you should know your rights before you enter the courtroom to avoid falling prey to unscrupulous collectors.

Statute of Limitations

Debt, including credit card debt, carries a statute of limitations in the State of Louisiana. This means that your creditors only have a certain amount of time to collect your debt. After this time period has passed they may not file suit against you in a Louisiana court room. The statute of limitations in Louisiana is three years for credit cards, also known as open accounts.

Exemptions

Even in the event of a judgment, your creditor cannot garnish all forms of income. Some types of income are totally protected, meaning that they cannot be garnished at all. Other types of income are only partially protected, meaning that they can be garnished up to a certain amount. Pensions, retirement funds, public assistance benefits and income from most forms of insurance policies are exempt from garnishment.

Procedure

Simply obtaining a judgment does not mean that your wages will be garnished. You must first fail to meet the terms of a judgment. After this, the creditor will have to take you back to court and request from a judge that your wages garnished. Remember that your creditor has already obtained a legal order for you to pay your debts. The garnishment hearing is about obtaining a ruling that you are earning sufficient funds to pay the judgment but are refusing to.

Garnishment Thresholds

The State of Louisiana's debt law sets limits on how much of a person's wages may be garnished. There are two ways the limit is measured. First, you cannot have more than 25 percent of your disposable income garnished. This means the money that you have left after paying for your basic needs. The second gauge is whatever you make above 30 times the federal minimum wage. You may not be garnished more than the lesser of these two figures.