Can my wages be garnished after a debt is charged off?

UPDATED: Jul 28, 2011

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Can my wages be garnished after a debt is charged off?

A judgement was entered for a debt owed and I set up a payment plan, but after a year of payments the debt has been charged off on my credit?

Asked on July 28, 2011 Michigan


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

When an account shows up as "charged off" in your credit report, that doesn't mean that you don't still legally owe the money, it just means the original creditor has given up on trying to get the money from you.  In other words, a charge off does not mean the debt has been canceled; you still owe that money but likely owe it to another party.

In most such cases, the creditor does not collect the debt from you but rather sells it to a collection agency. Since you owe the creditor, the debt is theirs to "assign" to another party so that they jump into the original creditor's shoes and can sue you as if you originally contracted with them.

At that point the collection agency can sue on the debt in court. If they prevail a judgement will be issued. The collection agency (the judgement creditor) can then garnish your (the "judgment debtor")
non-exempt assets. This includes the garnishemnt of wages as provided under state law.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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