Credit Card Garnishment

A common question asked by new clients is: how can credit cards garnish wages?  Well, they can garnish your wages just like any other creditor can garnish wages, meaning they can sue you, obtain a judgment against your (usually by default if you don’t appear and defend), and then garnish your wages.  So yes, your wages can be garnished to repay the revolving balances on your charge cards.  Your wages won’t be garnished the day you miss a payment. There are steps and legal procedures that the lender must first go through.  But ultimately your wages can and will be taken to pay off your account balances.

When Will My Wages be Garnished?

If you are behind on your credit card payments, you have likely been receiving constant telephone calls from your lender or its debt collectors.  Often these calls are rude or threatening and rise to the level of harassment, and other times the calls may be innocent attempts just to find out your intentions are with respect to a particular account and payment of the outstanding balance.  Whatever the intention behind the calls, you probably have realized that before your lender initiates legal action against you there will be a series of invasive phone calls.


But lenders cannot call you endlessly (even though sometimes it feels that way) because if they do so they will eventually lose their right to sue you due to the running of the limitations period for filing a lawsuit.  Under California law, a credit card company has four (4) years to sue you on the cardholder agreement, or else it will forever forfeit its legal right to sue you.   This is called a Statute of Limitations.  Once the Statute of Limitations runs, they can never sue you again, so they absolutely must sue you within 4 years.


It used to be that credit card lenders would wait until just before the 4-year Statute of Limitations expired and then sue you.  But with the downturn of the economy, and the credit card lenders struggling to make money just like the rest of the businesses in the nation, they have started suing customers much sooner than they had done for many years.  No longer do lenders wait until just before the Statute of Limitations expires to sue you.  Nowadays they file their lawsuits much sooner.


More and more, credit card companies are transferring customer accounts to aggressive debt collectors and collection law firms who will sue you as soon as they are legally allowed to sue you under your credit card agreement.  Under most cardholder agreements, once you have missed a payment and are 30 days late, the creditor can declare the entire outstanding balance of your account due and payable in full and sue you immediately to collect the full balance due on the charge card.


As an economic decision to avoid incurring legal costs and/or losses, your lender will typically make several attempts to contact you, and if unsuccessful it will typically transfer the account to its legal department, or if it does not have a legal department, then to a debt collector or collection law firm who specializes in suing customers to collect charge card balances.


Before suing you, as an economic decision to save costs, the debt collector or collection law firm will typically make a certain number of attempts to contact you and demand that you pay off your balance, then transfer the file to a debt collector or collection law firm who may try calling you for another couple of months to demand that you pay off your balance.

When Does Garnishment Usually Begin?


Similar to other creditors garnishing wages, credit card companies, or their debt collectors or law firms, have to first sue you and obtain a judgment against you before the can garnish your wages that you receive from employment.


Once your credit card lender obtains a judgment against you, a garnishment of your wages can begin immediately, that is, the creditor or debt collector can immediately proceed to garnish your wages from employment.  Usually, 25% of  your wages will be garnished under California law.

Bankruptcy Will Stop Garnishment

Filing bankruptcy will both stop wage garnishment and will eliminate credit card debt forever so that your credit card lender is never again able to garnish your wages.  Bankruptcy stops the garnishment and eliminates the debt, giving you a chance to have a fresh financial start and start rebuilding your credit.