Your employer may call you into the office with some awkward news. Your wages are being garnished due to a Citibank judgment awarded against you for past credit card debt. You may have known about the debt or not, you may have been served or not, but now money is coming out of your pocket.
Garnishment of wages is always a collection tool of last resort even after a collection agency is taken a crack at it – and as a tool of last resort, it is frequently the harshest of them all. This is a penalty that is applied only to accounts that are 180 or more days past due. In the case of defaulted debt, the account may be more than 270 days past due. In some cases, the debt may be a year or two old.
To put it bluntly, nobody gets to the point of a Citibank judgment overnight.
Cause of Debt vs. Symptom of Debt
The thing about debt is that there’s usually not just one factor that drives it. People with credit card debt tend to have other kinds of debt as well. Student loans, automobile loans, payday loans, medical bills, legal bills, child support, and other types of debt frequently show up alongside credit card debt. In fact, Americans are in more debt than ever. In August 2017 US consumer debt was $3.766 trillion and of that amount, $2.8 million of it was non-revolving debt. Non-revolving debt is something that you typically pay off in installments, and do not replenish at the end of your payment schedule. For example student loans mortgages, and medical bills are considered non-revolving debt.
Revolving debt is a line of credit that you have to spend on goods and services, and pay off your balance on a monthly basis in order to restore your access to credit. When a line of credit is maxed out, you can no longer access the credit embodied by that card. If you do not pay down the balance the debt may be called a delinquent account after 30 days, or be considered an account in default between 180 and 270 days after your payment was due.
Credit card debt began to skyrocket after the Bankruptcy Protection Act of 2005. You might think from the title that this was meant to protect people in bankruptcy. Instead, it made it far more difficult for people to file for bankruptcy. On the eve of the Great Recession, people began to turn to credit cards in order to pay their bills – including medical bills which are still the number one cause of bankruptcy. During the recession, banks cut back on consumer lending, including credit cards. The Dodd-Frank Wall Street Reform act also increased regulations over issuing banks. At the same time, unemployed Americans turned to education in order to improve their chances of getting a job and having a secure financial future. For many, this meant student loans – some with repayment terms as long as 25 years.
For many people, the recession never truly ended. They have not seen a rise in their wages or a betterment of their prospects. Many have been shuffling credit card deck back-and-forth for longer than a decade, and it is catching up to them. Which is how you have ended up standing in your employer’s office learning that your wages are about to be garnished. You’re not alone. Now, let’s talk about how to get out of that.
Financial Self-Defense: Stopping a Citibank Judgment
There’s a sense of helplessness when people get a summons from a huge corporate entity like Citibank. You think, “I’m just one person! I can’t afford a lawyer! There’s no way for me to stop this!” You’re in shock, alarmed, and depressed. Your back may already be against a financial wall, and a Citibank judgment is just going to hurt even more. All is not lost, and there are ways to fight this thing.
Let’s take it step by step from the moment you get that first call from a collection agency. You may not be able to pay, but you can document your interactions regarding this debt.
- Remember that a debt collector is not only collecting on the original balance but a number of fees and penalties that have accrued. They are also adding on their own operational overhead. The amount that they are telling you includes all of those additional fees and expenses. If you are dealing with the debt collector, you may be able to make an offer in settlement.
- If you have received a summons, never ever ignore it. Citibank is taking you to court to recover the debt, and if you do not respond or show up they will receive a default judgment. The Citibank judgment enables them to garnish your wages or even your bank account. Ignore a summons at your peril.
- If you never received a summons, but you have received a notice of judgment, you need to contact an attorney right away. You are entitled to appeal the judgment, and to do that you need an attorney who is accustomed to handling Citibank judgment cases.
- Finally, if it has gotten to the point where your wages are about to be garnished and this will do irreparable financial damage to you, it is time to consider filing for bankruptcy. The automatic stay lifts all judgments and garnishments once bankruptcy has been filed.
At Van Horn Law Group we understand that debt can take many different forms and have many different origins and outcomes. We are here for you through the difficult times and are there to help you get back on your feet. Don’t compound the damage to your finances by trying to do this yourself, you can depend on our attorneys and our experience to guide you safely through your Citibank judgment case. Whether it’s a settlement, or bankruptcy, or anything in between, we will give you our best legal guidance and advice.