Collection Threats - Fact or Fiction

In the years that I have practiced as a bankruptcy attorney in Arizona, one of the most common things that drives a client into my office in a state of panic is the threats he hears coming from collectors. In response to these fears I think it is important to separate fact from fiction.

Scenario: You are sitting at home watching a new episode of Grey's Anatomy, trying to get your mind off your troubles for an hour or so. On the show, they have just wheeled a tragically injured single mother into surgery and just at that moment the patient's vital signs begin to crash. You are on the edge of your seat, and you think to yourself, will McDreamy be able to save this poor soul or not, and if not, what will happen to her adorable, precocious two year old? All of a sudden your cell phone rings and you are so involved with the plight of the patient in this episode of your favorite show that you momentarily forget yourself and answer the phone (even though you have been purposefully avoiding answering all calls from any unknown numbers because you know you weren't able to pay your credit card bills this month).

"Shoot," you think to yourself, "I wasn't supposed to answer the phone." Of course, on the other end of the phone line is an angry guy shouting horrible things at you. He starts right in with shaming you and moves to insults. He never lets you get a word in edgewise. Anytime you attempt to explain or defend yourself, he is right there talking over you. He doesn't care that you were downsized from your job and have been unable to find another one. He doesn't care that you haven't been able to afford food or pay your utilities either. His insults turn threatening and he begins to tell you that if you don't give him a payment over the phone right now, he will just go ahead and garnish your bank account. He makes you think that he will be depleting your bank account tomorrow. You plead with him by telling him that you expect to get a positive answer from one of those job interviews that you went on this week, and if he would just give you some more time, you will send in your payment. He ends the call by making you believe that even if you are successful in getting that job, he will just garnish your wages before you even get them. You hang up the phone thinking you are in no better shape than McDreamy's patient.

So let's separate the fact from fiction. Can creditors call you and harass you, sometimes insult you, and instill feelings of shame? In most cases they can. So unfortunately, this is not a fiction, but more of a fact. Can creditors hang up the phone with you and immediately garnish your wages or bank account? Absolutely not, this is fiction.

In order for a creditor to be able to garnish you, he must first serve you with a complaint and summons. If you do not answer the creditor's complaint within the statutory time frame, that creditor can get a default judgment against you for the amount that the creditor listed in his complaint. The creditor can then file a writ of garnishment and get a court order which would allow garnishment of your bank account or your wages in order to satisfy that judgment. All of these things take time and court action. It can't happen overnight and it can't happen unless the creditor has first followed the steps outlined.

The Writ of Garnishment, is what grants the creditor the legal authority to notify your bank of the Garnishment Order. The Garnishment Order allows the creditor to garnish or take everything you have in your bank accounts up to the amount of the judgment with the exception of $150.00. If you are employed, the creditor will also send the Writ of Garnishment to your employer. After receiving the writ of garnishment order, your employer will be required to withhold a maximum of 25% of your net income per paycheck and send it to your creditor. This is called wage garnishment and it will continue until the entire judgment is satisfied.

Now that we have overcome the fearful fiction of collectors, remember that the attorneys at Campbell & Coombs, P.C. have successfully represented many people through the bankruptcy process and successfully protected their bank accounts and wages from garnishment. It is important to speak with an experienced bankruptcy attorney to ensure you are not buying into fearful fiction but combating that fiction with knowledge and truth. You can even tune back into some television without fearing a collection call, because just like McDreamy, you've got knowledge and skill on your side.