According to Creditcards.com, American households that currently have credit card debt hold an average balance exceeding $10,000. This statistic is troubling enough without realizing America’s younger generation is a significant contributor. The average college senior now graduates with more than $20,000 in debt, over $4,000 on their credit cards.
People typifying these statistics should act quickly and contact their creditor – preferably with the help of an experienced debt relief attorney – to reach an affordable repayment plan fitting their budget.
The Mistake of Ignoring Debt
Confronting an escalating debt problem can be very beneficial to someone who is behind on credit payments. Unfortunately, many people chose to ignore their credit issues, something which can be very costly down the road.
Credit card companies and other lending institutions – as well as the IRS for delinquent taxes – have powerful tools to collect past-due debts. For example, after a judgment has been entered against a borrower, a court may issue a creditor a Writ of Garnishment. This writ allows a creditor to receive payments directly from a debtor’s paycheck, thus making a person’s employer aware of their financial troubles.
Foxbusiness.com states, however, garnishments are considered a collection tool of last resort as creditors prefer to avoid litigation, although it is often deemed necessary.
Collection Lawsuits and Limited Debtor Relief
According to Foxbusiness.com, if a creditor decides it cannot collect a debt, then it may sell it to a debt collection agency. At this point a consumer can expect collection calls to increase, and if a creditor stills proves unsuccessful in collecting, then a lawsuit is typically filed.
Assuming a judgment for the creditor and a Writ of Garnishment has been issued, the only recourse a debtor has is to ask the court to reduce the amount garnished per check. This is typically allowed only if the amount taken from a paycheck severely limits the debtor to provide for their family.
Luckily, however, it is in both parties’ interests to avoid litigation. Creditors want to recover their money even if it takes longer than originally scheduled, and most people truly want to pay off their debts.
There are also many consumer protection laws to prevent against creditor harassment and other predatory collection practices. To better understand these laws, the affect a wage garnishment may have, and for assistance planning a debt free future, people are encouraged to consult a professional debt relief attorney.