Black & LoBello Bankruptcy

The answer is yes and no.  Yes, a creditor can garnish your paycheck but only after they have gone through the necessary legal steps to do so.

Here is the process a creditor must go through to garnish your wages.  First, the creditor must file a lawsuit against you.  You then have to be served with the lawsuit and you will at that time be able to defend yourself.  If you lose, either after you defend yourself or just don’t file an answer, the creditor will ask the Court and receive a judgment against you.  After the creditor has received the judgment he can petition the Court for a writ of garnishment of your paycheck. The Court generally signs this writ (another word for an Order) when the creditor files it. The Writ of Garnishment is then sent to your employer (and the creditor may or may not know who the employer is).

When the employer gets the writ of garnishment, they are bound by the Court’s Order to withhold money from your paycheck and send it to the creditor. Nevada law protects 75% of your wages in order to leave you enough money for the necessities of life, but needless to say you will be left with very little to survive.

In the end, the wage garnishment process can take months to pan out.  Thus, if a creditor/collection agency has told you that they will garnish tomorrow if you don’t pay today, and you haven’t been served with a lawsuit/there is no judgment existing, then you may have an excellent case to sue the creditor for violations of your state and/or federal debt collection laws.

If however a creditor has gone through the necessary steps and properly obtained a wage garnishment order all is not lost.  Bankruptcy will immediately stop all wage garnishment orders and allow you a fresh start.  So, if you are served with a wage garnishment I highly recommend you seek.

I keep several credit cards, however, I try to never keep a balance to avoid any and all finance charges.  However, many people don’t have the discipline to pay off their credit cards every month and as such fall into credit card debt.  Who knew that a little piece of plastic we call a credit card could cause so much havoc on your finances.

So what types of excuses have we used in order for us to fool ourselves into using that credit card, just once more? Here is a short list of ten common excuses for unplanned charges on our credit cards:

1. There is a bargain you just can’t turn down.

You are at Best Buy and the TV you have always been dreaming of is on sale.  You think to yourself that you are in the right place at the right time.  As you begin to think about whether you can buy the TV and whether it was in your budget a sales person approaches you with the kicker, 0% interest for 12 months.  But you really have to think, do you really need this item now and are you really saving enough to justify this spontaneous purchase?

2. The rewards from credit card purchases are worth it.

I try and only use credit cards that offer bonus points/cash back from certain purchases such as gas and groceries. I have to tell you, it has been working out great. In the end, you have to remember that there is a reason why credit companies offer these types of reward programs because people usually don’t pay off the entire balance and instead rack up significant interest charges. They want your business and your interest, plain and simple.

In order for you to really capitalize on the rewards is to avoid any and all interest charges by paying off your balance each month. If not, you’re falling into the ‘free’ rewards trap.

3. The 0% introductory rate is big help when making big purchases.

Remember that new shiny TV we talked about earlier.  We both know the TV was not in your budget, well at least the sticker price isn’t.  But if you buy the TV interest free for 12 months your payment will only be $125.00 per month.  You think to yourself that TV is now affordable.  Up front, we say we’ll pay off the balance, but in reality, we get sucked into buying even more until the period is over and you’re stuck with massive finance charges.

The same goes for 0% balance transfers. Sure, some people can avoid paying any interest by transferring credit debt from card to card, but if you forget for any period of time and you’re stuck with more high interest debt. Avoid the 0% interest trap!

4. It’s for an emergency!

So you have an emergency fund, or maybe not, but there comes along a purchase, such as a home repair, that you decide might be best to charge it instead of tapping into your emergency fund. You’d like to keep your emergency fund intact and cheat just this once into charging the expense. It’ll only happen once, right?

5. We’ve been good, so time to treat ourselves.

It’s been a long month on the job and you and the wife are just tired of staying home for the weekend.  Instead, lets go to California for the weekend and enjoy the beaches. Maybe you had that eye on the latest iPhone that Apple released. You’ve worked hard for you money and now it’s time to buy something for yourself. By charging it, you almost taking away a little of the guilt since you don’t see the immediate impact of seeing the funds quickly disappear from the bank account.

Just because you think you deserve it, it doesn’t mean that suddenly you are immune to any finance charges on your credit card you may incur.  The $2,500 trip to California will end up costing you $4,000+.  Budget for your vacations and treats for yourself. 

6. I’ll start paying off my debt next month.

Why waste your fun money by starting to pay off your debt, the debt can wait.  But, while the debt waits the interest charges accumulate.  Every so often you can justify a purchase by saying to yourself that you are going to make changes to your budget to have the additional funds to pay down that debt. Months go by and it never happens. You need to have the attitude to start NOW or you may fall victim to the continuous cycle of credit card debt. It’s time to follow through to the promise you made to yourself to achieve your goals of being debt free.

7. I’m going to get a raise soon.

Let’s be honest with ourselves, you are lucky to have a job let alone be expecting a raise and/or bonus.  In today’s economy bonuses and raises are a thing of the past.  Plus, even if you do get that raise in three months you want to be able to enjoy it THEN and not be paying of credit card debt from months ago.  You work hard and you deserve to splurge your bonus and/or raise but WAIT to get it.

8. This is the last time.

You have your plan of not using your credit cards until you pay off the balance. But wait, before that, I just need to make one more additional purchase. One more purchase won’t hurt, right? Hook, line and sinker; you’ve just avoided following through with your plan of paying off your debt. Next time is always the last time until you cut up your cards for good until your debt is gone.

9. The payments are small.

You see the signs everywhere around you. ‘You can have this TV or computer for only $40 month!’ What the sign won’t tell you is that you could be ending up paying 25% for the TV because of all the finance charges you’ve racked up by paying the minimums each month. If you can’t afford it now, you really shouldn’t consider any of the gimics stores try and lure you in with.

10. It’s only for a small purchase.

You have that time where you don’t have enough cash on you, so you are forced to use your card. Time after time, the small charges will be adding up. If you already had a balance on your card to begin with, you are fighting the uphill battle again by becoming debt free. You don’t want that $6 lunch to turn into a $7 lunch month after month. Try and use cash for small purchases as much as possible, especially if there is no gain in making the credit card purchase.

In the end, credit card debt can do nothing but bad for your financial health.  While the rewards are enticing the risk is too great.  What excuses have you used in order for us to fool ourselves into using that credit card?  Please share!