can a collection agency seize bank account/garnish wages for credit card debt?

Question

stopped paying on a couple credit cards because I thought I would be out of a job (stupid mistake). One was opened in 1999 and the other in Jan 2001. I stopped paying around 2001/2002 respectively. Owed is $980 on one, and around $2000 on the other. I'm wondering if the collection agency will take me to court for such small amounts. I've thought about contacting them but I would have to make payments for quite some time. From what I've heard that can't go after my wages/bank accts unless they actually send me a letter stating they are suing me in court. I have a PO Box so they don't know where I live and I just changed jobs. An accounts manager I know told me not to worry because the amounts are so small that it would cost them more just to get a CA lawyer (1 collection agency is in Nevada, the other in Michigan) and take me to court. I wish I had never done this, but I did and just ignored it. Should I worry?

Answer 1

First I want to say that you "should not" send the letter that was posted. It will almost be a guarantee that they will sue you after receiving it.
That letter is a full cease and desist. After receiving it, the collection agencies must stop trying to collect from you. So it leaves them no choice but to either sell the account or to sue.

As for the amount's you quoted, I've seen people sued for far less. If the collector sues and wins, the court costs are paid by the defendant.

Collectors cannot seize/garnish without going to court and winning first. If you live in a state that does not allow garnishment, then they cannot garnish even if they win.
Collectors have been known to put a freeze on bank accounts before going to court (just an FYI)

As far as being served, you would have to read your states rules of service to see what is legal or not.
Your state may require face to face service or it could allow mailing the summons or even posting it in the paper.

The first thing you should do is check the collecting SOL for your state so you know where you stand. If you are out of SOL you do have a legal right to send the a SOL letter, which informs them the debt is past the legal SOL and no longer collectible.

What you would do after that would depend on the collecting SOL for your state and if you plan on paying or not.

I would suggest clicking on my profile and do some reading in the links I have listed to the FDCPA, FCRA and click on the last link I have listed and do some reading in the credit forum. It is a very good, and free, credit discussion board where you can see how others dealt with the same situations, find links and references to your state laws and sample letter templates.

Answer 2

Can Collection Agencies Garnish Wages

Answer 3

This Site Might Help You.

RE:
can a collection agency seize bank account/garnish wages for credit card debt?
stopped paying on a couple credit cards because I thought I would be out of a job (stupid mistake). One was opened in 1999 and the other in Jan 2001. I stopped paying around 2001/2002 respectively. Owed is $980 on one, and around $2000 on the other. I'm wondering if the collection agency will...

Answer 4

Echo's answer covers most of what I would have said...let me add a couple things.

Whether a collector sues you greatly depends on the amount of the debt and where you live in relation to the collection agency.

Many times they won't mess with debts under $500...for $2000 you will be a target.

Remember that just because the address of the collection agency says Nevada doesn't mean they don't have a local office in your state. If they have a local office, they will sue for even small amounts because they are already going to court to hear other cases, and the court will group all their cases on one docket. I've seen the same collection lawyer do a dozen cases in a row. So you need to look at these factors.

Your debts are 5-6 years old currently. After7 years (from the date of the delinquency) they will drop off your credit report. As time goes by, the effect of negative items on your report lesson, but if you pay off the debt, it will turn your listing to a recent standing, and that will hurt your credit until it finally drops off.

So my recommendation is to follow Echo's advice and find out what the SOL is.....if it's over the limit ignore them. If it's real close don't pay it and see if they goof up and fail to file.

DO NOT try hiding behind a Post Office box. Process servers have a number of ways to locate your real address, and in many states they can actually serve you by sending to your PO Box. I do process serving on the side, and in most states is very simple to find you this way.

Answer 5

For the best answers, search on this site https://shorturl.im/ayhao

They can get a judgement but I seriously doubt they want to go through the hassle for such a small debt. Even if they could garnish wages, which I don't think they can for credit card debt, they won't even get what your minimum monthly payment would be if you can prove all of your money goes to neccessary bills and living expenses. See if you can negiotiate a settlement with the credit card company that will save you both time, money and headaches if not just send them something every month and they can't say you are not paying down your debt. Good Luck

Answer 6

A judge could order a garnishment. That's the only way the collection agencies can touch your paycheck. Your credit will be trashed for 7 years however.

Also send them this letter.

(Date)

To Whom It May Concern:

I have been contacted by your company about a debt you allege I owe. I am instructing you not to contact me further in connection with this debt. Under the Fair Debt Collection Practices Act, a federal law, you may not contact me further once I have notified you not to do so.

Sincerely,

(Name)

(Account No.)

Answer 7

Empirically, I know that Creditors and debt collectors have a lot of different ways to try to collect on loans or debts you may owe them. Sure, there are the traditional phone calls and collection letters. But some creditors can record a lien against your property, levy your bank account, garnish your wages, or repossess your car or other personal property.

Good luck

Jose

Answer 8

I would like to add that a judge can order a garnish on your wages at a percentage, but the judge can also authorize the debt collector to hit your bank account directly at which point they can collect 100% or everything that is deposited into your account for 30 days.

Answer 9

Your somewhat right. They are small amounts, and what will most likely happen is after a long period of time they will "write off" the amount they lost due to you, report it to the government as a loss and inform the credit bureau's of your action. This status will effect you for a good 10+ years, and it will show up when anyone checks your credit report. This might stop a landlord from letting you rent an apartment, it may stop you from being able to obtain any credit cards/financing/home mortgage/car loans in the future. In the present time, your credit report is also used by employers to see how worthy you are. I hope you never need any help for a loooong time, or a new job. Good luck.

Answer 10

I owe Verizon $450, and they already have collections after me after 3 months. I'm afraid of the agency seizing my income as well, as I have a son due in mid February.