debt

Creditor can garnish 1 party in joint debt

Steve BucciQuestionDear Debt Adviser,
My husband and I had a joint overdraft account. Can they garnish only my wages for the full debt?
-- Judy

AnswerDear Judy,
Sorry Judy, this is your unlucky day! The short answer to your question is yes, your wages alone can be garnished to fully satisfy a joint debt. Most joint debts, and this would apply to an overdraft on a joint account or an overdraft on a joint account with overdraft protection, are covered by what is referred to as "joint and several liability." For your joint account, what this means is that each of you is equally responsible for paying all the debt that's due on the account. However, that does not mean that the creditor must collect from both of you. It only means that the collector has a choice of which of you to pursue.

Whoever is owed the money is only interested in collecting what is due by any and all legal means. It could be that your employment information was easier to find than your husband's, or it might have just been listed first. If the collection process has progressed to the point of garnishment, the creditor is likely following the path of least resistance. And I can't say that I blame them.

Your garnishment is the end result of a long series of letters, calls, summons and court actions on behalf of the creditor to get either of you to step up and pay what is owed or to negotiate a mutually acceptable, repayment plan. My guess is that this debt is between six months and a year old or older. So while you may not like the garnishment, it shouldn't be a surprise. In fact, it may be a blessing in disguise. Now, you and your other half will have to deal with the debt and, it's hoped, the reason this happened in the first place.

You should be aware that there are rules that limit the amount that can be garnished from your wages. Generally speaking, only 25 percent of disposable earnings after federal, state and local taxes, Social Security and state employee retirement -- if they work for the state -- can be garnished each pay period. So, depending on how much you owe, you can expect 25 percent of your pay to be garnished until the full debt is paid. The only alternative to avoid the garnishment is to contact the creditor and pay what is owed before the order to garnish is received by your employer.

On the bright side, in addition to now getting this debt behind you, the Consumer Credit Protection Act prevents your employer from terminating you because of a wage garnishment. Plus, I'm going to leave you with some advice on how to avoid being in this situation again. First, keep track of what you owe and contact your creditors if you find that you will be unable to make a monthly payment. Many creditors have short-term programs to help people through a financial rough patch and to avoid going into collection.

Second, check your credit report annually at AnnualCreditReport.com and review for any accounts that may have slipped through the cracks and fallen into collection. Lastly, come up with a spending plan that brings your expenses under your income and allows you to save some money each month.

If, at the end of the day, all this seems unfair to you, my experience with marriage and wives is that when my wife is unhappy, everyone is unhappy. So, you may want to consider having your other half reimburse you for his share of the debt for which you are being garnished.

Good luck!

Ask the adviser

To ask a question of the Debt Adviser, go to the "Ask the Experts" page and select "Debt" as the topic. Read more Debt Adviser columns and more stories about debt management.
 

Bankrate's content, including the guidance of its advice-and-expert columns and this Web site, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this Web site is governed by Bankrate's Terms of Use.

News alert Create a news alert for "debt management"

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CREDIT CARD WEEKLY NEWSLETTER

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.

Debt Adviser

When is debt off credit report?

Dear Debt Adviser, How do I find out the timeline on my debt? I know after six or seven years the debt is taken off. I would like to know if there is a way to see if it is gone. -- Mark Dear Mark, Now you see it, now... Read more

advertisement
Partner Center
advertisement

Connect with us