When you apply and get approved for a credit card, it is with the understanding that you will repay all charges you make on your account plus interest. If you fail to pay as agreed, you have defaulted on your agreement. If you ignore the bills the creditor or its collection agency sends you, it can take measures, such as wage garnishment, to recover the unpaid debt.
Determination
A creditor or debt collector can garnish your wages if the state you are paid in allows it. Some states, such as South Carolina and Texas, do not allow creditors to garnish wages, but many do. Creditors that cannot garnish in one state may be able to do so in another. For example, a Texas creditor can seek to your garnish wages if you work in a state that allows it. If the state does not allow wage garnishments, some creditors use other methods to collect the debt, such as freezing the debtor's bank account.
Process
To garnish wages, a creditor must first file a lawsuit against you. The court serves you with papers and includes information on how you can respond the suit. File an appeal if you have objections to the suit. The court will schedule a hearing for you to attend so you can plea your case. If the court agrees with the creditor, it issues a judgment against you. If you do not pay the judgment, the creditor can apply for a wage garnishment with the same court, if the state allows wage garnishments.
The court or the creditor send your employer the wage garnishment so it can begin withholding from your wages.
Limit
Title III of the Consumer Credit Protection Act sets the federal limit for wage garnishments. Your employer cannot withhold more than the lesser of 25 percent of your disposable income or the total by which your disposable wages exceed 30 times the federal minimum hourly wage. Your disposable income is your pay before legally required deductions are subtracted. State law may set a lower limit; your employer should use the lesser amount.
Considerations
If the garnishment is preventing you from affording basic necessities, such as food and shelter, contact the issuing court and file a hardship claim. The judge may order you to pay a smaller amount. Check your local courthouse for the statute of limitations---the time frame in which a creditor can seek judgment and enforce it via garnishment.
Consumer Protection
The Fair Debt Collection Practices Act, which the Federal Trade Commission enforces, forbids debt collectors from using unfair, deceptive and abusive methods to collect a debt. Disallowed practices include harassment, making false statements and stating that will garnish your wages unless the law allows this course of action and the collector plans on enforcing it.
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