Can Credit Card Debt Attach a Judgment to Your Bank Accounts?

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Credit cards are easy to use but with their high interest charges can be very hard to pay back. If you fall seriously behind, your credit card company has many options to collect from you. With a court judgment in their favor, they can even take money right out of your bank accounts.

Credit Card Delinquency

Technically, you become delinquent if you don't make a payment when your credit card is due. With some cards, even being a few hours late can leave you subject to a late fee and an interest rate increase. The later you get, though, the more serious it becomes. After you are 30 days late, the credit card company will usually report your delinquency to the credit agencies, harming your credit score. If you and your card issuer can't work something out to get you back on track, it or a collection agency that it hires could sue you.

The Lawsuit

When your credit card company sues you, you'll receive a formal summons letting you know of the lawsuit and how to proceed. If you don't show up to court to defend yourself, you will automatically lose. Your creditor will have to prove that you owe the money to win if you do show up. If it does, the court will probably find for it and issue a judgment in its favor.

Collecting on Judgments

While the process varies from state to state, once your credit card company has a judgment against you, it can get the court's help to collect the debt. The court can force you to disclose information about your finances, including your bank account numbers, to the creditor. It can then attach the account and seize some or all of your money, up to the amount of the judgment.

Avoiding a Lawsuit

Generally, it's best to avoid letting your debts come to a lawsuit and a judgment against you. Most creditors don't want to sue you, either, since it is time-consuming and expensive for them. With this in mind, you might be able to work out a payment plan or even a settlement that lets you pay off your debt without having to get sued. Your credit card company may even accept a partial payment as a way to make the issue go away.