The short answer to this is Yes. Even though credit card debt is not secured debt, you can be sued for defaulting on credit card debt and be taken to court.
Once in court, they can garnish your wages. While the rules for taking you to court depends on the state that you are in, generally, most states do allow creditors to take the debtors to court for credit card debt default.
There are several instances where credit card companies have taken debtors to court for credit card defaults of amounts as small as $4000.
What happens if I am taken to court for credit card debt default?
While the specifics depend on your situation, what we describe below is a real life situation that a lot of people have already gone through. So, while most people treat this scenario as the worst case scenario, it is one, that can really occur.
If your credit card company sues you and takes you to court, you will not get a real trial. That means that you will just be asked to verify your identity and asked whether you really incurred those debts. If you answer in the affirmative, then the trial will be over then and there. The judge can ask your wages to be garnished and add the cost of the courts and attorneys to the debts. This amount will then be deducted from your salary every month. As you can well imagine, this becomes a socially embarrassing situation as you will need to explain the condition to your HR department and your coworkers will eventually learn about it.
What is the best thing to do if I know I can’t pay my debts?
If you want to eliminate all chances of going through the hell we described above, call your credit card company and explain your situation.
The credit card companies want their money and they may be willing to freeze your interest going forward and chalk out a payment plan with you. This is very often the best scenario for a lot of people who can’t afford to pay their debts any longer. They may even waive off your fees.
The specifics will depend on your situation, but it is better to call your credit card company and find out your alternatives before stopping payments altogether.
If you find yourself in a situation where you may not be able to make payments, do not procrastinate, act immediately. If you wait too long, you may find yourself in a position from which it is difficult to recover. Once you default on your credit card payments, it will go to the collection agencies. The collection agencies make life really difficult by calling up work and home and creating embarrassing situations.
The default will also appear on your credit report and will ruin your credit score.
It is better to avoid all this and act quickly and decisively. This way, even if your situation worsens, you will be fully aware of what is going on in your life and will not be left second guessing on what happens next.
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