Garnishments increase due to poor economy
Many consumers are beginning to find that old debts not only hurt a credit score, but bank accounts as well. Van Tran, 55, learned this the hard way when he was brought into court after $8,016 was seized from his savings account by Discover. Industry analysts say that under a legal process known as garnishment, issuers are not required to prove that debt is owed in a courtroom.
Garnishment is becoming more popular as credit card companies search for new means of profit due to the sluggish economy, the Minneapolis Star-Tribune reports. In Minnesota, where Tran was brought to court, court-approved seizures by issuers have tripled over the past four years. There is no record of the garnishments that take place outside of courtrooms.
Debt collectors claim that garnishments are not unwarranted, however. Officials say they give borrowers fair warning before dipping into their bank accounts, according to the Star-Tribune, and they are often left with no other choice.
To avoid garnishment or facing debt-collecting agencies, consumers should pay off their credit cards in a timely manner. This can also reduce the risk of credit score damage.