The best time to argue your case or settle the debt for less than you owe was before the judgment was assessed.
During my marriage, I opened a credit card in my name because my ex-husband had been in business with his brother. My brother-in-law’s addiction drove my ex to near bankruptcy.
My husband and I used my card for living expenses, as well as trying to keep our small deli business afloat. After we divorced, he agreed that once he got on his feet, he would take care of the credit card debt since he used it for business purposes as well.
Well, my wages are now being garnished. The original judgment by the court was for $4,300, but the garnishment is waged at $10,000 due to fees placed on the debt for nonpayment by the collection agency.
I have almost paid off the original judgment amount. What must I do to stop from paying more than what was the original amount owed before filing suit for some part of this judgment against my ex? Why must I pay for a debt that was bought for pennies on the dollar and for an amount that was never owed? – Melanie
You apparently understand that the credit card debt is still your responsibility, regardless of your ex’s promise to pay it off, and you are doing the right thing paying it off yourself as quickly as possible.
Some people think they can assign card debt to a spouse in divorce court or claim the debt wasn’t theirs because it was the spouse’s expenses. However, the credit card companies don’t see it that way. Their contract is with the primary account holder, and nothing in divorce court changes that.
See related:How wage garnishment works – and how to avoid it
As to the huge amount of the garnishment, I have little good news for you.
When the collection company buys the debt from the credit card company, for pennies on the dollar as you say, they still have the right to collect the full amount of the debt at charge-off. They can generally also add fees and interest, according to the terms of your contract with the original credit card company. (Some states have further restrictions on fees and interest that collectors can charge.)
It may seem impossible for a $4,300 debt to now be $10,000, but it can happen. Your interest rate no doubt went up drastically when the payments went into arrears. I’ve known people whose credit card interest rates shot up to 33 percent or higher when they got into trouble. It wouldn’t take long at that rate, throwing in a few late fees for good measure, to double or even triple an original debt.
Tip: When issued a court summons for unpaid debt, know that you can always try to offer a lump sum settlement for less than the total amount owed.
Your options after a wage garnishment order
Once the judgment is assessed, your options to get out of paying are few. The best time to argue or offer to pay less than the amount owed has passed was when you were sued for the debt.
When you received the court notice or summons was when you had the opportunity to ask the collector to verify the debt and tell you what the amount of the debt was when it was charged off. That was also the time to offer a lump sum settlement, if you had the funds available, or to present a claim of exemption if the garnishment would prevent you from meeting your daily living expenses.
Your options now, if this garnishment is making it hard for you to get by and pay your bills or if you have other debts that are difficult for you to pay, is to seek an adjustment to the amount of garnished from each paycheck or file an appeal with the court.
However, the time to file an appeal may have passed as there is a window in which to file. Check your paperwork to see.
You may want to search for a consumer lawyer who will take your case, or schedule an appointment with a credit counselor with a nonprofit agency affiliated with the National Foundation for Credit Counseling or the Financial Counseling Association of America.
The credit counselor may offer some budgeting suggestions or other assistance during this painful repayment period.
I hope that your ex is soon “on his feet” and can pay you back in full. Make sure he pays the total amount, including fees and interest, he owes you.
If you are unsuccessful in getting him to pay, and the agreement to pay off his portion of the debt was in the divorce decree, you can use the power of the divorce courts to make sure he follows through.