I have a partner in our LLC. We have no money to continue our business. We have 2 credit cards that we owe money on totaling $15,000, but cannot pay for it any longer. I am just surviving personally and so is my partner.We called the 2 credit cards and asked if they could lower the interest rate and monthly payments. One bank refused and asked for our personal financials. I am concerned that if we stop paying, the bank can come after me by garnishing my paycheck.What can I do? Am I liable for garnishment if I stop all payment? My LLC account has no money in it and there LLC has no collateral at all.Annie
Country relating to Question: United States
We discussed with the credit card companies and one was willing to lower the monthly payments. The other credit card company was not interested in lowering anything and wanted our personal financials.
Good afternoon. Were these credit cards taken out in the name of the LLC without any personal guarantees from the members?
I am afraid we did give our personal guarantees.
Thanks. In that case, the companies would have the right to pursue you individually and would have the right to request your personal information. They cannot take any action against your assets or wages however until they first obtain a judgment against you. You don't mention in what state you are located, but there are four states that prohibit garnishment of wages by credit card creditors...Texas, SC, NC, and PA.
I hope this has given you information that has been helpful to you. If the information seems more general than specific, please be aware that we are only allowed to provide information and not specific advice. If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping others or taking a break. If you need additional clarification on this question, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you. Please be aware that the information provided here is not legal advice. Rather it is simply general information. All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
How long does it take for them to get a judgement on me and what is the garnishment percentage on my salary?
The time period depends upon the diligence of the creditor, but generally they don't file the suit until about 6 months. With regard to garnishment limits......
Title III of the Consumer Credit Protection Act protects employees by limiting the amount of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage prescribed by Section 6(a) (1) of the Fair Labor Standards Act of 1938. This limit applies regardless of how many garnishment orders an employer receives. The federal minimum wage is currently $7.25 per hour.
Title III permits a greater amount of an employee's wages to be garnished for child support, bankruptcy, or federal or state tax payments. Title III allows up to 50 percent of an employee's disposable earnings to be garnished for child support if the employee is supporting a current spouse or child, who is not the subject of the support order, and up to 60 percent if the employee is not doing so. An additional five percent may be garnished for support payments over 12 weeks in arrears.
An employee's "disposable earnings" is the amount of earnings left after legally required deductions (e.g., federal, state and local taxes; Social Security; unemployment insurance; and state employee retirement systems) have been made. Deductions not required by law (e.g., union dues, health and life insurance, and charitable contributions) are not subtracted from gross earnings when the amount of disposable earnings for garnishment purposes is calculated.
Okay. I live in NJ but wok in NY. I am taxed through NY, not NJ. I read that NY will garnish, at most, 10% of my disposable salary for credit cards. Is this current information?
I will opt out so that a NY lawyer can answer this specifically with regard to your state's laws.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).