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Can a Bank Actually Garnish Your Paycheck?

If you’ve gotten behind on your credit card payments, you’ve got to be frustrated about the high late fees and the increased interest rate your bank has hit you with. But that may not be the worst of your troubles. Did you know that your bank could go straight to your employer and force them to pay the bank a portion of your paycheck directly? It’s called wage garnishment, and if you continue to miss credit card payments, the bank won’t hesitate to use this tool to collect. Here’s how it works.

If you’re six months or so delinquent, the bank will likely go to state court to get a judgment on the amount you owe. The bank files suit against you, serving a summons and complaint through the mail. You can answer the complaint, if you feel you have a defense or if the amount of the debt is in question. If you don’t answer, the court will give the bank a default judgment. The court will schedule a hearing and in all likelihood will award your bank a judgment, confirming that you owe the amount in question.

Next, the bank may demand payment one last time. If you can’t negotiate a payment plan with the bank, it can ask the court to allow it to garnish your wages to collect what you owe. After the court grants permission, the bank sends garnishment papers to your employer, requiring your employer to deduct funds directly from your paycheck and send them directly to the bank.

Garnishment has several harsh consequences for you. First, it denies you the freedom to prioritize your expenses. Instead of you deciding to pay for rent, food, medicine, child support and nondischargeable debt (e.g. student loans) first, the bank gets first crack at your after-tax income. Secondly, it’s humiliating. Your employer – and, if your workplace is typical, all your coworkers – will know that you have a debt problem so bad that a court had to order your boss to dock your pay.

Can you prevent garnishment? Absolutely! At DebtStoppers, our bankruptcy attorneys can get you an automatic stay. That’s a court order for all your creditors to stop collection actions against you. The automatic stay protects your privacy, while the bankruptcy process allows you to discharge debt and start over with a clean slate.

If you’re behind on your credit card payments, don’t sit back and let more debt accumulate. Take a positive step today by calling us at 312-913-0630 or contacting our office online to schedule a free consultation.

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