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Can Debt Collectors Garnish Wages or Bank Accounts?

debt collector garnish wages

While the best way to handle debt is to address it head-on, that’s not how it usually goes. Most people start falling further and further behind on payments, only to get hit with a court summons. At this point, you might wonder how the collector will get what you owe them. They may get the money you owe from your wages or your bank account.

If your debt is more than you can handle and you’re not sure how to protect your future and your credit, we’re here to help. Call Ron Aslam Law Office at 502-581-1676 to schedule a consultation today.

Getting a Judgment

The first step in garnishing your wages or bank accounts is getting a judgment against you. If you get served with court paperwork, it will tell you when your court date is, how much you are being sued for, and what your next steps are. At court, the judge will determine whether or not you owe the money.

Many collectors get a default judgment because debtors simply do not show up to court. If you do not go to your court date, the collector automatically wins. Even if the debtor does show up, they usually still end up with a judgment against them.

Once the debt collector has a judgment against you, they can enforce that judgment. This might mean actually seizing the money you owe.

Garnishing Your Wages and Accounts

As soon as the debt collector has a judgment against you, you can expect them to begin collection efforts. The more time they spend sitting on your debt and trying to collect it, the more money they spend on collection efforts. If they’ve already reached the point of going to court, they have already spent a considerable amount of time and money on your case—they won’t want to waste any more time.

The debt collector might go after your bank accounts first. This often comes as an unpleasant surprise to debtors, who swipe their card one day only to get a “Declined” response. This can cause problems for quite a while, since not only do they collect any money in the account at the time of garnishment, they also have the right to collect funds deposited in the account after the initial order. This means that any wages or deposits that hit your account could end up going toward your debt.

You may also find that your wages are garnished. The debt collector will notify your employer and send them proof of a judgment against you. Per federal law, up to 25% of your disposable earnings may be seized for debt.

Right of Offset

There’s another way a debt collector may take you by surprise. If your debt is owned by the same bank where you have checking or savings accounts, they may be able to seize your money without even getting a court order. The right of offset allows the bank to take money from your checking or savings account to pay down a car loan or other loan that is behind.

Under federal law, banks cannot do this with credit cards. However, debt like car loans and personal loans are not covered under this law. If you bank at a credit union, they may have more flexibility in using the right of offset.

Don’t Get Taken by Surprise

The lesson to learn here is this: do not ignore initial debt collection efforts or attempts at contact. Yes, it might be embarrassing to face your debt head-on, but managing it from the start can help you avoid the financial devastation of a garnishment. In many cases, collectors are willing to set up more flexible payment plans if you work with them. This saves them money, as it keeps them from having to go to court and garnish your wages. The sooner you take control of your finances, the sooner you can get back on track.

Contact Ron Aslam Law Office If Your Debt is Out of Control

If you are facing garnishment, debt lawsuits, or the possibility of bankruptcy, you need to learn more about your options and figure out how to move forward. That’s where the team at Ron Aslam Law Office comes in. Set up a meeting now by calling us at 501-581-1676 or reaching out online.