When a person gets into credit card debt, the creditor can take a number of actions to reclaim its money. Credit card companies charge steep rates of interest, as well as additional fees, to customers who miss payments to encourage payment. However, if a borrower still does not make good on his debt, credit card companies may take more serious measures, such as attempting to garnish the borrower's wages.
Garnishment
Garnishment is the process in which a person has a form of income seized and turned over to a creditor. In a typical garnishment, a creditor will request a judge to allow it to garnish a debtor's wages. If the judge grants the petition, the creditor will show the order to the debtor's employer, and request that a portion of the person's income is handed over.
Courts
A garnishment can only occur if a creditor receives an order from the court granting the garnishment. Generally, a creditor seeking to garnish a debtor's wages will hire an attorney. While a credit card company may go to the trouble of garnishing a card holder's wage, the legal expenses and the time spent pursuing the garnishment make it relatively unlikely that the credit card company will pursue this action against most debtors.
Exemptions
According to the Federal Trade Commission, there are a number of types of federal benefits that cannot be garnished by creditors. These include Social Security benefits, as well as several types of retirement and disability benefits. In addition, many state laws put limits on the percentage of a particular source of income that can be garnished at any one time.
Alternatives to Garnishment
While a credit card company may be legally allowed to garnish wages, the company also has a number of alternatives to garnishment that it might pursue instead. These include calling and writing letters to the debtor; putting liens on the debtor's property; and freezing a portion of the debtor's bank account.
State Laws
According to the Federal Trade Commission and the BCS Alliance, state laws regarding garnishment, which determine both what income can and cannot be garnished, as well as the precise process of the garnishment, vary greatly. Collectors seeking to garnish wages should check with an attorney versed in state law first, as should borrowers who are being threatened with garnishment.
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