Wage Garnishment: The Hidden Danger of Credit Card Default

by Fred Abramson on April 5, 2010 · 0 comments

The New York Times reports today that more struggling borrowers are facing wage garnishment than ever before. Because many credit card borrowers decide not to defend their case in court, creditors can win big judgments in court.

I recently wrote an article outlining what you should legally do if your wages have been garnished. You should go into the court where the judgment has been entered and make a motion to vacate the default.

The New York City courts have a strong policy of having cases decided on its merits.  Generally you have to prove that your were not served properly and show that you have a valid defense.

Let’s say you moved from Forest Hills to the West Village and never received the summons and complaint. In addition, there was an incorrect charge from Le Bernadine for $650.  It looks like someone stole your identity and was having a grand old time dining through the grand palaces of New York haute cuisine.   The judge will likely vacate the judgment and remove the wage garnishment.  Your case will then proceed and will be decided on its merits.

Even if you do owe the money, you should always defend yourself in court. Here’s why:

  • You force the credit card company to prove your debts.  When I first started practicing law, I litigated thousands of cases for a large bank. The bank subsequently merged with another bank and the attorney who sent me the cases lost the businesses.  The bank usually did not have the necessary paperwork, such as credit card statements, to prove their case.
  • Even if the credit card company has the paperwork to prove the debt, if you defend your case the court in New York requires someone with knowledge to testify as a witness. Since many debts are resold to a third party. These third parties may not have a presence in New York.  As a result, they may not have anyone who can testify regarding the validity of debt.  You may win your case even if you owe the debt.
  • Most credit card user agreements allow for huge interest charges, penalties and even attorney fees to be added.  In nearly all cases, in New York the judge will strong arm the credit card company to waive the fees.
  • Credit card companies understand that there is a difference between obtaining a judgment and collecting on it.  It also costs the attorney valuable time to litigate the case in court.  As soon as you receive the summons and complaint, a call should be made to the attorney for the credit card company to discuss settlement. It is not unusual to obtain a settlement for a fraction of what you owe.

If you have been sued for a credit card debt, feel free to contact me at the Law Office of Frederic R. Abramson at 212-233-0666.

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