Can Creditors Garnish My Wages for Unpaid Debt?

Reader Question: I have some unpaid debts on a couple of credit cards. Can these creditors garnish my wages for what I owe them?

The short answer to your question is yes, a creditor can use wage garnishing if it's approved in a court of law. But there's more to this issue, so let's take a closer look. First, I'd like to offer some definitions for other readers who may not be familiar with this topic.

• Creditor -- This can be any organization that has extended credit to you in some way. A creditor can be a credit card company, a department store that has extended you a line of credit, or a bank. There are other types of creditors, but these are the most common ones within the context of your question.
• Garnish -- This is a legal term that simply means to withhold pay, earnings or other assets. In most cases, garnishment must to be approved by a judge. Such is the case with creditors, as we will soon see.

Situations When They Can Garnish Wages

Let's say I go to a department store and open up a store credit card. In this scenario the store becomes my creditor, because they are extending me a line of credit to make in-store purchases.

Let's further assume that I make some purchases and rack up a balance of $1,200, but then I stop making payments on the debt. Can the creditor garnish my wages in this kind of situation? Yes, but it must be initiated by a lawsuit and approved by a judge. They cannot just "swoop" in and take my money away.

It's also important to realize that garnishment of wages is usually a last resort. Nobody wants to go through a court trial, if it can be avoided. So the store mentioned in the earlier scenario would probably make repeated attempts to collect on the debt, before initiating a lawsuit against me. They would send me letter about the unpaid debt, call me on the phone, etc. Eventually, they might even turn the account over to a debt collection agency. But neither the original creditor nor the debt collector could garnish my wages without court approval.

What Your Creditors Cannot Do

I've stated that a creditor can sue you in court, and that such a lawsuit might result in the garnishment of your wages. But debt collectors cannot use this as a threat. They can take such action -- they just can't use it as a harassment / intimidation tactic. There are federal laws that prevent this, namely the Fair Debt Collection Practices Act (FDCPA). For example, if a creditor or collector calls me on the phone and says, "You better pay this debt or we will sue you and garnish your wages" ... then they have violated the FDCPA.

These laws are enforced by the Federal Trade Commission. So let's go straight to the source and see what the FTC says about the subject. The FTC says that creditors are prohibited from saying "they'll seize, garnish, attach ... wages unless they are permitted by law to take the action and intend to do so." In other words, they can't even mention unless they've already been given permission by a judge to garnish your wages for the amount owed.

It's also important to realize that there's a statute of limitations on this kind of lawsuit. In non-legal terms, that simply means there's a time limit for how long they can sue you, after you have defaulted on the account. This will vary from one state to another, so you should check your state attorney general's website for more information (or do a state-specific Google search for the information).

Related Articles and Information

This article was written in response to the question: Can creditors garnish my wages to cover debts? Here are some related articles we've written in the past, as well as related resources on other sites:

• Can a Collection Agency Sue Me in Court?
• Can a Credit Card Company Sue Me?
• Statute of Limitations for Debt Collectors
• FAQs About the Fair Debt Collection Practices Act (FTC website)

We hope this answers your question about garnishment of wages, and we thank you for using our website for guidance.