Dear Liz: You recently answered a question from a business owner who defaulted on some credit card accounts and wanted to know how to pay these old debts. How is it that this person has not been subjected to numerous judgments on the cards in question? In fact, how could he or she have proceeded in business without being subjected to garnishment of accounts?
Answer: To get a judgment and a garnishment, the credit card company or a subsequent collector typically must sue the borrower in court. Different collectors have different policies about when to file such lawsuits. Sometimes they decide it’s not worth the hassle given the slim chances of collecting. However, many collectors also regularly check’ credit reports to see if a debtor’s financial circumstances seem to be improving. If they see signs of such improvement, they may renew collection attempts, including lawsuits.
To start a garnishment, a bill collector must not only sue the debtor, they must win the judgment in court. This is usually easy because most debtors don’t even show up in court. Once they have the judgment, and it hasn’t been appealed, then the garnishment hearing proceedings can start. Getting a garnishment is incredibly hard to do. But even if the garnishment is eventually awarded by the Court, it can be appealed several times. Ultimately, it’s easier for a bill collector to wear down the debtor with constant phone calls and threatening letters until they pay. Even then, judgments can be negotiated down.
I once tried to get a garnishment against an employer who never paid me, and gave up because it was so complicated. Instead I put a lien against their liquor license for payment of the judgment. It was easier. I also have worked with a few ex-bill collectors who clued me in to how collection agencies work, so I have some personal experience in these matters. Hope this helps.
Thanks for sharing your experience!