Can a collection company garnish your spouse’s wages for debt that you owe?

A reader, Jack, had this question:

Is wage garnishment a possibility in bankruptcy? We have a company that might have to be closed. But as we have given personal guarantee they will come after us after that. If my spouse is a high earner can he be pulled into pay through using wage garnishment?

Jack

Thanks for your question Jack. The laws that cover wage garnishment vary by state, so you will need to have a quick (and free) consult with a lawyer where you live.

I can give you a general idea though. At the very least a collection company will be able to sue, obtain a judgment, and get their hands on your joint assets.

As far as garnishing his income, it really does depend on your state’s laws.

Typically with a bankruptcy though, the debt should be covered within the bankruptcy. The collection company should not be able to garnish anyone’s wages over any debt that was included in your bankruptcy filing.

Definitely email a local law office to check, but as long as the debt was included in the bankruptcy (either with a repayment plan or without) then the bankruptcy itself should stop all possibility of a garnishment.

How to get credit without a credit history:

What can you do when you have no credit history and want to build one? What if no one will give you credit?

One of our readers, Amanda , had this question:

Mr Credit Card,

I graduated from high school June ‘08 and am attending college in Fall ‘09. I’ve tried to get credit cards to help pay for my schoolbooks and laptop but haven’t had any luck because I basically have no credit history.

How can you build your credit history if no one will give you credit? Especially someone fresh from high school?

Amanda

Hi Amanda,

It can be a little difficult to get the ball rolling as far as credit is concerned, but not impossible.

Here are a few tips that can help you build a great credit history, so that you never have to worry about getting credit again:

Why You need a secured credit card:

Secured credit cards usually have very fair terms, and they are designed to help you build a solid credit history. Secured cards pretty much always report to each of the three credit bureaus every single month. So as long as you pay your bills on time, you get a positive payment record that will literally raise your credit score every month.

Secured credit cards are also very easy to get since you are securing the loan with your own money. You can start a secured credit account with as little as $200 – $300 dollars. The amount you deposit becomes your credit limit.

Secured cards are also a wonderful fail-safe for someone just starting out like you are. If, for any reason you aren’t able to pay off your bill, then the money you deposited will be used to pay the bill. This default protection can literally save your credit score if something happens.

If all goes well, in about six months to a year, your secured credit card should convert to an unsecured credit card and you will get your deposit money back.

Secured credit cards also have much lower interest rates than unsecured credit cards for people with little to no credit.

You can find out more about secured credit cards by visiting this link:

Why You Need An Unsecured Credit Card Too:

Unsecured credit cards for people building their credit do not always have wonderful terms, but you will still want at least one of them.

Occasionally, some secured credit cards will report as being a secured loan on your credit report. (Most do not, but a few do). So, just in case you want at least one revolving credit account that does not report that way.

Try to make sure that whatever card you choose does report to all three credit bureaus each month. Otherwise that card will never help to raise your credit score.

You can find out more about credit building credit cards by clicking the links below:

Why You Need A Store Credit Card:

The fastest way to raise your credit (as far as I can tell) is to have at least three revolving credit accounts.

Store credit cards are typically very easy to get. Target is probably a great place to start, as well as any place you shop at regularly. Walmart, etc. Someplace where you can buy school supplies as well as groceries.

You can learn more about store credit cards by following this link:

How to manage your credit accounts:

There are a few other things you need to know before you start putting in credit applications. These things will literally save your credit score if you do them right.

You have the chance right now to build an amazing credit history. If you do that, you will never have to worry about being able to finance a car or a house, or get a loan. All you have to do is consistently follow these steps:

1. Make your monthly payments on time, every time: Set up an auto-draft out of your checking account if you need too, but never, never pay the bill late. No matter what you have to do!
2. Keep your balances low: Companies do not like to give cards to people with no credit history because they have no idea how well, or poorly they will use credit. If you want a high credit score, then you should never charge more than 30% of your available credit.

   That means that if you have a credit card with a $300 limit, you should never charge more than $90 on it for any reason. The minute you do, your credit score will not go up – even if you make your payments on time.

3. Pay your balance off in full each month - This last step is the most important one. Please, please do not ever get into the habit of carrying a revolving balance on your credit cards. If you follow this one simple rule from the start, you will always be better off than at 90% of the population of the United States. Don’t fall into the credit trap! If you carry a balance you will never be able to use some of credit’s greatest rewards – things like cash back offers and reward points. They only work for people who pay their bills in full each month.

As a final note, do not apply for all three credit cards at once. Doing so will lower your credit score and actually make it more difficult for you to get a loan. Put in a single application, and then wait at least a month or two before putting in another application. This gives your new credit card time to report positive payment, and it gives your credit score a chance to recover a little before you have any more inquiries.

Thanks for your question, and best of luck as you build your credit history!

Have a question for us? Leave a comment below!

Keep Reading:

• Can Your Spouse Hurt Your Credit Score? The Good, The Bad, And The Ugly
• Debt Your Spouse Doesn’t Know About
• Should One Spouse Have All The Credit Cards?

This entry was posted on Thursday, March 5th, 2009 at 15:39 and is filed under Bankruptcy FAQ, Reader's FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.