If I have reached a settlement with a debt collection company, can my wages still be garnished if they take this matter to court?

UPDATED: Jan 15, 2013

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If I have reached a settlement with a debt collection company, can my wages still be garnished if they take this matter to court?

I currently owe a credit card agency $4,700. They have sent my debt to collections. I informed the collection agency that I will be sending them some money every month to pay off my debt since right now I do not have the whole amount. To date, the collection agency has already received 2 money orders from me. The total up to $40 the collection agency has accepted my payments and cashed the money orders.

Asked on January 15, 2013 under Bankruptcy Law, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

IF there is a settlement--a mutually agreed-to payment plan or schedule, for example--then so long as you honor your obligations under it, you cannot be sue, your wages cannot be garnished, etc. The issue is whether there is a settlement: you telling the creditor or collections that you will send them some money every month does NOT create a settlement; and a settlement isn't even created by their accepting your payments, since if you owe them money, they have a right to any partial payments towards that debt you make. The debtor cannot him- or herself make the creditor/collections accept a settlement; you need some evidence (e.g. something in writing) showing that they have accepted the proposed payment plan; only if you can show that they affirmatively agreed to it, would they be bound to it.

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