In some situations, unpaid credit card debt can lead to a lawsuit. The lawsuit could lead to a potential judgment. If someone has a credit card debt judgment against you, your wages, your bank account and your property are at risk.
In California, the judgment rate of interest is set at 10%. (The judgment interest rate could vary state to state). That means that if there is a judgment out against you that is a few years old (or several) it has been accumulating interest. The balance has actually been going up in the years since you last paid on the original credit card balance.
Having a judgment out against you means that you are now vulnerable to having your wages garnished. This would require that they go back to court, but this could be completed by any experienced collection attorney in less than 45 days. Your wages could be garnished in less than 2 months from the date you received notice that there was a judgment out against you.
This particular type of judgment has a long shelf life. It’s good for 10 years from the date the order was signed by the court. At the end of the 10 years, the creditor can very easily renew the judgment using a simple process. Once renewed, it’s in force for another 10 years. The judgment can be renewed again every 10 years. Considering this, it’s easy to see how this type of judgment can follow you around for decades.
In most cases, there is room for negotiation. Almost any attorney will be more interested in receiving a lump sum amount to settle the case instead of monthly payments garnished from your paycheck. Attorneys handling this type of collection are well aware of the risks associated with wage garnishment.
Employers are not legally allowed to fire an employee for having their wages garnished, but too often, they find other, convenient reasons to dismiss the employee once the garnishment is in place. Employers are not big fans of employees who are experiencing financial, emotional or situational distress. Employees in these types of tough situations are distracted on the job, may take shortcuts, etc. For instance, the military and police force are both much less likely to hire someone in financial distress of any type, as they are more likely to be susceptible to bribery in order to resolve their personal problems.
If you have a judgment out against you, take it seriously. The best option for you if you want to protect your credit is to pay the debt. Others turn to bankruptcy in order to eliminate the judgment and associated balance. You can also attempt to settle the account with a lump sum payment. The only option that you shouldn’t consider for even a minute is to ignore the problem and hope it goes away. This type of problem will find you over and over until you address the issue.
For more information on California bankruptcy, wage garnishment or eliminating a judgment through bankruptcy, call the Southern California bankruptcy attorneys at Westgate Law.