Typically, a credit card company will not sue you unless you have fallen dramatically behind on paying your bill. If your creditor sues you for non-payment, the court may grant a judgment against you, which is essentially a court order forcing you to repay your debts. If you live in South Carolina, you have certain protections against judgments, although creditors still have options for collecting on the debt you owe.
Wage Garnishment
In most states, the objective of a creditor filing a lawsuit is to obtain a judgment against a debtor. Usually, a judgment allows the creditor to use the court to garnish the wages of a debtor. Federal law allows creditors with judgments to garnish as much as 25 percent of a debtor's paycheck in most states. However, South Carolina has consumer protection laws that shield debtor's from wage garnishments. According to state law, your creditors cannot garnish a single dime from your wages, even with a judgment in hand.
Liens and Other Garnishments
While South Carolina protects debtors against wage garnishment, creditors have other options to collect on outstanding debts. With a judgment from the court, your credit card company has the power to place a lien on any of your real property. While a lien does not immediately take money out of your pocket, it does prohibit you from certain future financial transactions. For example, a lien forces you to pay off your debt before you can sell or refinance the underlying property. Additionally, in South Carolina a credit card company with a judgment can seize money from your bank account to satisfy the judgment.
Bankruptcy
While it may not always be the best option, if a credit card company sues you in South Carolina you may have to consider bankruptcy. The main advantage of bankruptcy is that it frees you from your outstanding debt, and it has the power to effectively void any outstanding judgments. If you file bankruptcy in South Carolina and get your discharge, your credit card company can no longer place a lien against your property or seize money in your bank accounts.
Settlement
One way to avoid liens, bank account garnishments and bankruptcy in South Carolina is to simply cut a deal with your creditor. When you receive your lawsuit papers, you have time to contact your creditor and work out a deal before the lawsuit reaches the courthouse. Oftentimes, a creditor may be willing to accept a smaller total amount if you can pay an immediate, up-front lump sum. Creditors may also be open to negotiation to avoid the time and expense of actually presenting the lawsuit in court.
0 comments:
Post a Comment