I hit some hard times and I'm extremely late on some credit cards. What rights does the creditor have per a judicial judgement. What would b...

Question

I hit some hard times and I'm extremely late on some credit cards. What rights does the creditor have per a judicial judgement. What would be the basis to garnish wages for that?

Answer

In North Carolina, there is no general debt garnishment. Now, if you owe child support or taxes, you might be subject to garnishment, but for general credit card debt they cannot garnish wages.

Answer

There is no wage garnishment for credit card debt. That said, if this has gone to judgment, that is not the end of the matter. Judgments last forever. The judgment will get bigger and earns 8% interest per year. The judgment is collectible for 10 years after it is entered, but it can be renewed for another 10 years. So that is 20 years for this to be hanging over your head. While it is there, it remains on your credit report. Getting any kind of credit, with an outstanding unpaid judgment, will be difficult or next to impossible if you are looking for a decent interest rate.

So you need to think about how you plan on resolving the debt, if not today, in the immediate future. If you have a lot of debts, then maybe you want to file bankruptcy if you are relatively young and hope to obtain credit or acquire assets in the future. If you are elderly and on a fixed income and will not be needing credit, then bankruptcy is not an option.

You can pay the judgment directly or at the courthouse. In either case, keep track of your payments and be mindful of the fact that there is interest on the debt so you want to make sure that you pay enough to cover the accrued interest plus something on the principal. Depending on the assets that you have, this is not the option I would recommend.

You can also try to resolve the debt for less than what you owe. If you are disciplined, then try to save up as much as you can and when you have about 50% of the judgment saved (remember, the 50% will be on the judgment plus the accrued interest) you can try to resolve the debt. If they say no, see if you can use the 50% as a down payment and pay the balance over 1-6 payments. If they still want too much, keep saving and try again when you have more saved. Most creditors will accept between 50% and 80%, but it depends on your unique circumstances and why you have fallen on hard times.

If you would like to explore your other options and ways to protect yourself from execution, I give free email consults. I also can assist in resolving debts for a reasonable fee. Please contact me at [email protected]/* */ if interested.