Can a Credit Card Company Take Money Out of My Bank Account for Past-Due Amounts?

A credit card company cannot take money from your bank account for past-due payments unless it is specifically authorized to do so by you -- or by a court of law. Under normal circumstances the credit card company simply cannot arbitrarily raid your bank account for two or three missed payments. However, if you default on the credit card loan the card, company can file a lawsuit against you and gain permission from a civil court judge to take money from your savings and checking accounts.

Court Judgments

After filing a lawsuit, a credit card company can be granted a civil judgment against you. That means a judge reviewed the circumstances of the case and agreed with the credit card company that you defaulted on your account by not making payments as agreed. "The New York Times" reports that some people unwisely ignore notices about court dates and legal action regarding unpaid debt. The result can be an easy victory for the credit card company as the judge will automatically side with the card company if you fail to show up for a hearing. That leads to a so-called default judgment and moves the card company a step closer to gaining permission to access your bank accounts.

Bank Garnishment

Bank garnishment is a legal process used to force your bank to hand over money in your accounts to satisfy an unpaid debt. It is a formal order signed by a judge, and the bank is required by law to cooperate. Bank garnishment, which can be coupled with wage garnishment, is a debt collector's most powerful weapon. A bank garnishment order freezes your checking account, making it impossible for you to withdraw money, pay bills with checks or use your debit card. Meanwhile, money in the account is sent to the credit card company to satisfy the judgment.

Banking Information

The credit card company may have your checking or savings account information on file if you have ever paid with a paper check or provided your banking information over the telephone or online. The stored information makes it easy for you to schedule payments that you authorize, but the bank can use that same information to garnish your account after receiving permission from a judge.

Avoiding Garnishment

The best way to avoid bank garnishment is to avoid being sued. Speak to the card company about a payment plan if your account is still active and only a few payments behind. Garnishment is not possible without a judgment and court order, and that process can take months or even longer. If you have defaulted on the account, contact the credit card company or the debt collector in charge of the account to work out a settlement -- a recognized debt solution for paying off delinquent accounts. Banks will often settle defaulted credit card accounts for around half the balance or even less.