What to do if your bank account has been garnished?
One of the most common ways a credit card collection agency deals with credit card debt is to garnish your wages or bank accounts.
If your bank account is being garnished, it can be a very stressful and a complicated situation. However, there are multiple steps one can take to deal with it.
Here is a list of ways to deal with a credit card debt garnishment:
First, Understand Why Your Account Was Garnished:
A garnishment occurs after a court issue an order (ruling) that a creditor, including a credit card collection agency, may collect on the credit card debt you owe, by taking money directly from your bank account or wages. The creditor typically will obtain the ruling after they sue you in court and obtain a judgment which allows them to garnish wages and or your bank account.
Check the garnishment notice to see the details about the creditor, the amount owed, and the reason for the garnishment.
Take note that certain funds are exempt from garnishment:
- Note that certain funds in your account may be exempt from garnishment, examples of exempt funds include but are not limited to Unemployment Benefits, Social Security Benefits, Disability Benefits, and certain forms of Retirement Funds.
- If you have money that is exempt, you may file a claim of exemption with the court and ask for the garnishment to be removed. In fact, you may seek a payback of any exempt funds already garnished.
Seek a consultation with a Credit Card Debt Settlement Lawyer:
- If you are unsure about the garnishment or how to handle it, it’s a good idea to consult with a Credit Card Debt Settlement Attorney. A debt settlement attorney is equipped with the knowledge and experience to help you understand your legal rights and options in dealing with a garnishment, and most importantly whether there are legal grounds for challenging the garnishment.
- A good debt settlement attorney will offer a free consultation. Take advantage and set up your free consultation.
Remember you can negotiate with your credit card creditor:
- If you are lucky enough to have “extra” money, either a lump sum or money you can afford to pay towards a monthly settlement, don’t be afraid to try to work out a settlement with the credit card debt collector or debt collection attorney. If you are facing fiscal hardship, you may be able to lower the amount you owe by negotiating with the creditor directly to resolve the debt and stop the garnishment. It is not uncommon for credit card creditors to prefer to reach a repayment plan than to sue you and go through the garnishment process. If you reach a settlement, make sure you receive a signed and written Stipulation of Settlement (a binding legal agreement).
File for Bankruptcy (if applicable):
- In some cases, filing for bankruptcy may be an option to stop the garnishment. A bankruptcy filing can temporarily halt most garnishments through the Bankruptcy Stay. A stay occurs after you obtain a Chapter 7 case number. The Stay stops all creditors from pursuing you any further and will usually stop any garnishment.
- Of course, the filing of a chapter 7 bankruptcy is a means of last resort. This is usually a last resort. If you have too many credit cards and cannot see a way to pay them back or settle them, a Chapter 7 Bankruptcy can eliminate all of your credit card debt – this is because a credit card is unsecured credit, unlike a mortgage or car lease.
Keep yourself in the know and don’t ignore any court hearings:
- Always keep track of your garnishment and the process. This includes making sure to attend any court appearances or responding a timely fashion to legal notices in a timely manner, especially a lawsuit suing you. A failure to respond can lead to further legal complications, including a default judgment.
- If you don’t take immediate action to respond and combat the garnishment, it will usually will continue and penalties or fees might be added.
Keep an eye on your Bank Account:
- Make sure you are constantly monitoring your bank account(s) to determine if any further garnishments occur. Taking action quickly can help you regain control of your wages and money and potentially minimize the impact of a garnishment on your finances.
