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Thank you for your question.
Depending on your state, it is legal for a credit card company to garnish your wages to satisfy a judgment.
The problem with the insurance that your buy for credit cards is that they can require you to jump through hoops (i.e. visit a doctor, obtain a physician statement) before the insurance kicks in. It seems like the insurance company denied your claim because there was no doctor's note.
At this point, there may not be a lot that can be done other than making arrangements to pay off the card.
I am sorry.
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