Help! Can Debt Collectors Garnish Your Wages Ever?

I am getting threats from a debt collector for an old Bank of America credit card debt. Can they do this?

Is the account with a collection agency, debt buyer or attorney's office for collection?

The bottom line is that a creditor reserves the right to pursue legal action to collect a debt. However, in order to do this, they must assign the debt to a an attorney licensed in the state where you reside to file the suit. Or, they must have in-house attorneys on staff to prepare and file the suit (must be licensed in your state also of course). I know that Chase Bank uses in-house attorneys at times to collect on credit card debt in some states but I do not think Bank of America does.

If the account is with a collection agency or debt buyer, I would say that it is unlikely the creditor plans on filing a lawsuit to collect the debt at this point in time (it is still possible of course). If you get correspondence from a lawyer who is licensed where you live I would suggest contacting the law firm to see what your repayment options are. Of course, you can contact a collection agency or debt buyer to do the same thing.

To add to snicholson's insight-

That is true, they can file a lawsuit to try and collect the debt, which could ultimately lead to the creditor garnishing the debtor's wages if a resolution is not arranged. This would take some time though. Once the attorney is retained to file the lawsuit they will  try and contact the debtor and set up a payment plan for the balance in full or even potentially offer a settlement to satisfy the debt for a reduction of what is owed.

If you refuse to work something out with the attorney, at that time it is more likely that they would be forced to file the suit to try and collect. Even then, you would be served a summons and would have a chance to file an answer to that summons. Usually, people are given 20-30 days to file the answer, so you would still have a couple of weeks or so to try and set something up to avoid a garnishment at that point in time.

If you file an answer to the summons, it should buy you another few weeks to get something worked out as the court date is usually set one month from the time the answer was filed.

As you can see, it is possible for a creditor to garnish a debtor's wages. However, it would require you to do nothing to try and resolve the debt. Creditors usually only file lawsuits and attempt to garnish wages if they feel the debtor is actively neglecting to pay the debt off and does not communicate with the collector at all.

 

That helps a lot thank you both, I definately feel better about my situation. If it ever came to that though, how much is it that a creditor could garnish from my paycheck?

State laws allow a certain percentage on garnishing wages. Seventy-five percent is the across-the-board rate for garnishment exemptions for all states, but there are some exceptions to this rule. If you live in MA, for example, $125 will be deducted from your salary a week. It pretty much depends on your area's law.

So I understand that debt collectors can garnish your wages, but can they freeze my bank account too? I am getting threats from this collector at US Bank and I don't know if it is just a bluff?

Potentially yes. Again the creditor would have to file a lawsuit, win and obtain a judgment first. They would then send a Notice of Intent to Levy to your bank if there are funds sitting there that could be used to pay off your debts.
Careful though- if it is a US Bank credit card that you are behind on, it is possible that they could freeze your account without obtaining a judgment to do so. A lot of lenders have that in their contracts that are in place with the consumers who bank with them.

Can debt collectors garnish your wages if you are on social security?

Social Security is a source of fixed income. It can not be garnished to saistfy a credit card debt.