Expert: Regan Shinski - 11/14/2010

Question
To whom it may concern:
I recently have come into tough times financially. I am unable to pay for a person loan made through a credit card company. There is no collateral and the balance is around $20,000. Its now in a collection agency called redline. I talked to them and they are saying if i refuse to pay that they will contact the credit card company to start the refusal payment process. I was told by them that i will have to pay all kinds of attorney fees that will occur from this process that will be charged to my account. I was wondering if they can put a garnish on my wages from work or garnish my federal income tax return? They also told me that they will go after any assets that i have too, so can they do that? I told them that I do not have any money at this time to pay anything and they keep trying to pressure/scare me into giving them money, and i understand that they have a job to do, but i just wanted to know what they can do and what they cant do. So my main concern is about the garnish of wages, garnish of taxes, and if they can take me to court over this matter too. Thank You so very much for all the help.
Sincerely, Chris.

Answer
Hello Chris:

They can definitely sue you.  They can garnish wages, attack bank accounts, place liens on property, and even have law enforcement confiscate personal property for sale at auction.  Now, these collection techniques are not allowed in all states and different states have different exemptions, so you need to check your specific state's laws.  Directly taking of tax returns for a credit card debt is not allowed but they can get it indirectly through bank accounts.

You should not ignore any court documents.  If you don't show up a default judgement would be entered against you.

In general, your basic options are to pay, settle, file bankruptcy, or ignore it and take your chances.

Good luck, I wish I had better options for you.

Regan

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