If you make a minimum payment on an account, can a garnishment still be filed?

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If you make a minimum payment on an account, can a garnishment still be filed?

I was contacted last week  by a company who that I owe money to. I was told that I either had to give them the minimum payment, or they had to leave with my collateral. I paid the minimum payment. I was under the impression that by making the minimum payment, it’s a good faith payment, and it would restore my account from the collections stage, as well as stop any legal processes on the account. Today, I came into work, and received a garnishment notice from that company. Can they do this? Since the payment, my next scheduled payment hasn’t even passed yet (due in 2 weeks).

Asked on September 27, 2010 under Bankruptcy Law, Utah

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

IF there was an actual agreement between you and the company that by making the minimum payment, they would forestall collections activities, then that agreement  woudl be enforceable. However, if there was no actual agreement, then they can go ahead with collections, a law suit, etc.--since as a general matter, a creditor (unless it agrees otherwise) does not need to settle for anything less than payment in full on time. Note that an oral agreement between you and the creditor would be legally enforceable, but, as a pratical matter, proving that an oral agreement exists and what it's terms are can be very difficult, especially for a debtor, who will often be taken as being self-serving when he or she says, "But they agreed to just take the minimum payment." Always make sure to get agreements in writing.


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