When a person takes on a credit card debt, he is legally obligated to pay it back, just as he would any other kind of debt. The rules by which he must pay this debt back will vary depending on both the wording of the credit card contract and the laws of the state. In New York, retirees must pay back credit card debts, but creditors cannot seize certain types of income from them.
Credit Card Debt
A credit card debt is a loan drawn against a line of credit. If a person fails to pay back the loan under the terms of the contract, the credit card company will generally issue various late fees. If the person is in default for too long, the account will be closed, but interest will still be assessed against the debt. Being retired does not exempt a person from paying back this loan.
Retired Person
When a person is retired, he may draw his income from a number of different sources in lieu of receiving money for the performance of a job. Many retirees, if they are old enough, receive Social Security payments. Others, however, live off of savings accounts, while some receive pensions from their former employers. Many of these forms of income are protected against garnishment or seizure under both New York and federal law.
Debt Garnishment
Often, when a debtor refuses to pay, a creditor will attempt to seize the amount of debt directly from the person's income stream or bank account. This process, known as garnishment, involves siphoning funds from the person's account or directly from an entity that pays him money. Garnishment is harder to levy against a retired person, as federal law protects many types of retiree income, such as Social Security payments, from garnishment.
Statute of Limitations
In addition, if the debt is old enough, a creditor will no longer be able to sue for its recovery. In New York, the statute of limitations for filing a lawsuit against a debtor for the recovery of a debt is six years from the day on which the person first defaulted and never got straight with the creditor again. If the creditor does not file suit before this day, he cannot attempt to garnish the person's income.
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