Indiana law - unsecured credit card payment default

by Kelley
(Carmel, Indiana)


I have a number of unsecured credit cards with large, unpaid balances. I make $12 an hour, however, I have a mortgage, 2 children and many other essential bills that I must pay. I have paid the minimum on my credit cards for a while but moving forward I find it hard to pay anything.

My question is: if I were to stop paying anything at all to the credit cards, would they be able to garnish my wages to any degree? I have heard that they can take 25% or perhaps up to 75% of my wages. Is this based on state or federal law?

Thank you!

Kelley Tortorice

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Dec 08, 2011
Indiana law - unsecured credit card payment default

If you stop paying on your credit cards, the credit card companies will probably turn your accounts over to debt collection agencies and if you still don't pay what you owe, the companies are likely to sue you for the money that you owe eventually. If they win judgments against you they can ask the court for permission to collect on the judgments by taking money from your bank account, seizing assets that you own (although some types of assets are exempt from seizure), putting liens on assets and/or garnishing your wages. If they garnish your wages, your state's law determines the max that can be taken out of each of your paychecks each pay period.

Rather than not paying your credit card debts at all, there are some better alternatives you should consider. One is to see if you can renegotiate the terms of your card payments so that you can afford to continue paying on them. Be sure that you know exactly how much you can realistically afford to pay to each creditor before you try to negotiate lower monthly payments however.

Another option is to determine if you are a good candidate for a debt management program. To find out, you should contact a credit counseling agency in your area. One way to do that is to go to

Debt settlement may be something else you want to consider. Settlement involves paying a debt in full for less than the total amount that you owe on it. However, you will have to pay the amounts of each settlement you negotiate in a lump sum. Listen to this podcast if you want to learn more about how settlement works, debt settlement podcast.

The last option is to file for bankruptcy. If you qualify for Chapter 7 bankruptcy, you will be able to wipe out all of your credit card debt and possibly other unsecured debts you may owe. However, to find out if you are a good candidate for bankruptcy, you need to schedule a free initial evaluation with a bankruptcy attorney.

Best of luck resolving your debt problems. There are options (and solution), but doing nothing is not one of them.

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