The worry most debtors have is whether a credit card company can garnish their wages or bank account. Before a creditor can garnish your wages or bank account, they must receive a court order to do so. The process starts by filing a complaint in court against the debtor. A debtor can defend the action by having an attorney file an answer to the complaint. If the debtor does not take any action, the credit card company would receive a default judgment.
Once the credit card company obtains a judgment, they can proceed to attempt to collect the debt. Garnishment is an order directing the debtor’s bank to place a freeze on the money and distribute it to a creditor.
Wages cannot be garnished directly from an employer to satisfy a judgment obtained by a credit card company if the debtor lives and works in Pennsylvania. However, a credit card company has the ability to garnish a debtor’s bank account, including wages deposited into a bank account.
In order to garnish a debtor’s bank account, the credit card company must first obtain a judgment in court. Once a judgment is obtained and a Writ of Execution is filed, a credit card company can order a bank to freeze a debtor’s bank account. If a credit card company receives an order granting garnishment of a bank account, but for a few exceptions (e.g., Social Security), the entire bank account can be subject to garnishment. All wages paid into the bank account would then be subject to garnishment.
You can prevent the garnishment of your bank account if you file bankruptcy. Once a bankruptcy is filed, the creditor can no longer obtain money from the debtor’s bank account since all further collection actions are prevented by the automatic stay. A bankruptcy petition will “unfreeze” any bank accounts that have been frozen. Further, any money the creditor received within 90 days of your bankruptcy may be returned to you.
If you are interested in filing bankruptcy in Pennsylvania, call me at (610) 417-6345 to discuss your case.