Can you be garnished for a credit card debt?

Yes, your wages can be garnished over an unpaid credit card debt — especially if the debt ends up going to collections. Although many people associate wage garnishment with unpaid child support, defaulted student loans or back taxes, courts can also order your wages to be garnished over an outstanding credit card debt.

How much can a creditor garnish your paycheck for?

The maximum amount that can be garnished to a creditor is 25% or the amount your weekly income exceeds 30 times the federal minimum wage (currently $7.25 an hour), whichever is less. Therefore, if you work 40 hours a week at the Federal minimum wage and earn $290 per week, the maximum amount that could be garnished from your paycheck is $72.50.

What to do if you get a wage garnishment?

If the credit card company decides to pursue legal action against you to obtain a wage garnishment order, ensure you prepare for that. If you have an attorney, contact the office to request services; if you don’t have a lawyer, consider hiring one right away.

Can a paycheck be garnished for Social Security?

There are limits on how much of your paycheck can be garnished. The garnishment will be based upon your disposable income, which is your gross income minus any applicable state and federal taxes as well as any other legally required payments such as for social security or a state-sanctioned retirement account.

What happens when you get a wage garnishment?

With wage garnishment, a certain amount of every paycheck goes directly to the debt collector until your debt is paid in full. Your employer’s payroll department will have to deduct the money from your paycheck, which means your employer will be aware that you haven’t paid off your debts.

Can a credit card company garnish a stimulus check?

However, some states are passing laws to prevent credit card companies and debt collectors from garnishing stimulus checks. Likewise, some banks and credit card issuers have stated that they will not garnish stimulus money. The National Consumer Law Center gives guidance on how to protect your stimulus check from garnishment:

What happens if I owe money to a credit card company?

You’ll still owe the account—but you’ll owe it to the debt collector, not the original credit card company. Debt collectors buy the debt for a fraction of what you owe, then try to get you to make voluntary payments. The debt collector can also sue you in court.