How a Credit Card Company Can Garnish Wages: Jack’s Story
Most people know they should never miss credit card payments—but few understand just how far a credit card company can go if the debt goes unpaid. To make it simple, let’s look at a fictional example: Jack.
Jack’s Debt Problem
Jack had $20,000 in unsecured credit card debt. His minimum monthly payment was about $550.
For six months, Jack didn’t send the full minimum. Instead, he only sent $100 each month. While Jack thought he was showing “good faith” by paying something, it still violated his credit card agreement. From the creditor’s perspective, he was delinquent.
The Lawsuit
Because Jack wasn’t meeting his minimum payment obligation, late fees and interest piled up. After six months of partial payments, the credit card company filed a lawsuit.
When Jack didn’t successfully defend himself in court, the judge ruled in favor of the credit card company. This ruling is called a judgment—a legal confirmation that Jack owes the full debt plus interest, penalties, and court costs.
Garnishing Jack’s Wages
With the judgment in hand, the credit card company asked the court for a wage garnishment order.
The order went directly to Jack’s employer, who by law must now withhold a portion of Jack’s paycheck every pay period. Under federal law, up to 25% of his disposable income can be garnished. In some states, the limits are lower, but the result is the same: Jack takes home far less money until the debt is paid off.
What This Means for Jack
By not paying the minimum, Jack lost control of his debt. Even though he was sending $100 each month, the credit card company treated the account as delinquent. Now, instead of choosing how much to pay, a court order forces his employer to send part of his paycheck straight to the creditor.
Key Takeaways
PARTIAL PAYMENTS ARE NOT ENOUGH. If you don’t meet the minimum payment, your account is considered delinquent.
LAWSUITS CAN FOLLOW. Credit card companies may sue after months of missed or partial payments.
JUDGEMENTS HAVE TEETH. With a court judgment, creditors can garnish wages.
ACT EARLY. Negotiating a settlement or working with a debt relief program is often better than waiting for garnishment.
Final Word
Jack’s story shows that sending something isn’t always enough. If you don’t meet the required minimum, the credit card company can still take you to court and garnish your wages. The earlier you address a debt problem, the more options you’ll have—and the less likely you are to face the stress of a shrinking paycheck.
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