A credit card company can garnish a person’s wages following a successful judgment, which is why it is important to not ignore collection attempts. While it can be hard to fight wage garnishment after it is entered, consumers do have options to protect themselves in the event this does occur.
Settling the Debt
One of the best ways to avoid a wage garnishment is to work directly with the credit card company or debt collector. Many times, the company may be willing to work with the consumer rather than go through the effort and spend the legal fees to take them to court.
They may require the consumer provide some type of proof that his or her financial situation is solid enough to handle the settlement amount. If the debt is large, they may require some type of security to ensure payment will occur.
It is important that if you are unable to pay, that you do not provide the creditor with your bank account or credit card information. We advise our clients to be honest with creditors.
It is also important that consumers be aware that debt settlement does come with tax consequences. The IRS considers the amount of money that is forgiven from the original amount owed and the settlement figure as taxable income.
It usually helps if settlement discussions occur before a garnishment order is entered because the creditor will have very little motivation to want to settle the debt at that point.
Wage Garnishment Exemptions
If a garnishment order is entered, this fact does not mean that all wages will be up for grabs. In fact, most states allow some type of protection when it comes to wage garnishment. Wage earners normally can exempt up to 25 percent of their net income under wage garnishment exemptions.
Florida allows wage exemptions under Florida Statutes Section 222.11, including exemptions for heads of household and people who are not considered the heads of household.
To receive wage exemptions, the consumer will need to file a document with the court claiming the exemption. The judge will then review the exemption and decide whether it is valid.
Bankruptcy
In the event the consumer is not able to handle the garnishment once it is issued, bankruptcy is a possible option for eliminating the debt. A Chapter 7 bankruptcy can be used as a vehicle to end wage garnishment and get your financial life back on track by giving a fresh financial start. Since credit card debt is considered unsecured, it will likely end up being liquidated, along with other unsecured debt such as personal loans, medical bills, utility bills, back rent, etc.
If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
Related Resource:
https://www.nolo.com/legal-encyclopedia/can-credit-card-companies-garnish-wages.html