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Creditor Threatening to Garnish Spouse

A collector is threatening to garnish my spouse's wages. Can they do that?

I have recently been contacted stating that unless I settle they are going to issue a summons in order to obtain a judgment on an old credit card debt. The original debt was for about $1800. Now with interest it is over $3000. I actually made 3 payments about 3 years ago to settle, but never received a letter of settlement, and those payments are not applied to my balance. I am not sure what to do now. Since this debt was acquired before I was married, and now everything is in my husbands name only and I do not work. What will happen if they obtain a judgment? Will they be able to go after property that is in his name only, his wages or his bank accounts?

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Bill's Answer
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Updated: Oct 20, 2014

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The type of collection calls you describe are extremely common, and are rarely a cause for concern. Threatening consumers with immediate legal action resulting in judgment, wage garnishment, seizure of property, etc., is a tactic employed by many third party debt collectors and debt purchasing companies as a way to frighten consumers who are unfamiliar with the legal system into paying debts that are frequently not even legally enforceable.

Unless the company calling you is a law firm licensed to practice law in your state, then it almost certainly cannot sue you to enforce a debt, and may be violating Federal law (the Fair Debt Collections Practices Act) by telling you that it intends to take legal action against you. If the company contacting you is a law firm that is located or licensed in your state, you may have more cause for concern, as the law firm may initiate legal proceedings to obtain a judgment for the balance owed. In this situation, it may be wise to contact the law firm and negotiate an affordable payment plan or settlement to resolve the outstanding obligation.

If this creditor does obtain a judgment against you, it would likely be difficult for the creditor to enforce its judgment, since you are not employed and do not own any significant assets (you mention that these are all in your husband's name) against which the judgment could be enforced. The creditor almost certainly cannot garnish your husband's wages or seize his assets. Even if this debt were incurred after you were married, you are the only person who signed a credit agreement to open the account, so the legal obligation to repay this debt remains yours alone; your husband cannot be forced to pay your debts.

A handful of states, mostly in the Western US, use a marital property scheme called Community Property, which would allow creditors to pursue your husband for debt incurred by you while you and he were married; however, Kentucky is not a community property state, so this is not an issue for you. In addition, since you incurred this debt before marriage, your husband would not be liable, even if you lived in a community property state such as California.

You likely do not need to be overly concerned about the threats this collector is making, since legal action to collect old debts is used sparingly by creditors, and in your case would likely be unproductive given your current financial circumstances. If you are sued, I would encourage you to seek legal counsel in your area to discuss the best way to proceed. However, if this is a debt collector trying to intimidate you (which it probably is), then you should be able to stop the phone calls by sending the collection agency a "Cease Communications" demand letter. Collectors are required by Federal law to abide by such requests. Read more about dealing with collection agencies by visiting here: Help with Collector Calls

To read more about debt and how to address the debt problems you are facing, I encourage you to visit the Bills.com Debt Help page.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com