Credit Card Lawsuit: Facts About Bank Account Garnishment

It’s one of the worst nightmares you could ever have, a court granting your creditor the right to garnish your savings directly from your bank account to pay off a long forgotten debt. Unfortunately, bank garnishment is just one of the many ways creditors and collection companies have against delinquent debtors. The fact is, creditors have every right to file a credit card lawsuit for old debts and if deemed fit, the federal court could allow the creditor to deduct a massive amount of money from a debtor’s bank account to repay the debt.

The purpose of bank garnishment is make debtors who are then unfit to pay off debts, to pay NOW as they already pooled enough money to clear their debts. With this in mind, creditors could file a credit card lawsuit, prove that the debtor owed them money and if they win the credit card lawsuit, the federal court will grant the creditor’s request to garnish bank savings to repay the outstanding debt.

There are two basic types of garnishments for consumer debts. They are:

  • Wage Garnishment
  • Bank Garnishment

If you are a salaried individual, the federal court may issue a writ of garnishment with a portion of your paycheck going designated for debt payment. However, if you are unemployed and have no source of income at all, the federal court may issue an order where a chunk of your bank savings will be used to repay the debt.

If you are unemployed and currently facing possible bank garnishment because your creditor filed a credit card lawsuit, you need to know which accounts may be subject for garnishment. Usually, the court will review your financial situation and will garnish from all accounts except for those with some form of government benefit. Joint accounts are not exempted from bank account garnishment. Even when you try to transfer your funds out of your bank, your creditor can trace the funds and obtain a chunk of your savings. Worse, your account will be frozen once the court orders garnishment.

The only way to stop the court from ruling writ of garnishment is to prove to the court that the account should be exempted from garnishment. Garnishments are usually the last resort creditors take to collect outstanding debts. Usually, they will put lien on debtors’ properties. So if you got the properties that you don’t mind losing, you can offer your creditor a deal.

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