When someone is facing a credit card collection action, the last thing that person wants is to have his or her wages garnished by the credit card company. However, credit card companies do have the right to garnish a cardholder’s wages, just like any other creditor.
Before credit card debt can be collected, it must be considered delinquent. At the time a person gets a credit card, he or she enters into an agreement to make monthly payments. If these payments are not made on time, that contract is considered broken and the debt delinquent. Once this happens, the credit card company is within its right to collect on the debt. Normally, missing a credit card payment results in a significant interest rate hike, but if the debt goes unpaid for too long, the credit card company can file a legal action to collection on the debt.
This step is where garnishment comes into play. Credit card companies cannot garnish the cardholder’s wages without first filing a legal complaint to collect on the debt and serving the complaint on the cardholder. The accountholder has a chance to respond to the complaint and file an answer within a set period of time. If he or she does not respond, the credit card company can obtain a default judgment against the cardholder, speeding up the process. However, if the cardholder does respond, the credit card company must prove that the debt is owed at a hearing before a judge.