Action to Recover Default Balance

• In cases where a consumer has defaulted upon the repayment terms of his credit card obligation, the card company has the right to file a civil action against the consumer for recovery of the default balance owed. Under the provisions of the Fair Debt Collection Practices Act, the card company must file suit in the judicial district for the state in which the debtor resides.
  
  

Obtaining a Judgment

• Once a card company prevails in its legal action against the debtor, a court will make an entry of judgment on its docket in favor of the card company. The entry of judgment identifies the debtor as well as the amount of damages awarded to the card company. As a judgment creditor, the card company can commence various collection procedures to recoup the amount it was awarded in court. These include garnishing wages, placing a lien on the debtor’s real property and attaching his bank account(s).
  
  

Executing the Judgment

• In most jurisdictions, before a judgment holder can initiate post-judgment collection procedures, he must first ask the court for an execution. An execution bears the seal of the issuing court and states that the judgment creditor is entitled to the amount of damages specified therein.
  
  

Court-Approved Attachment

• Once a card company has been issued an execution, it can “levy on the execution,” or ask the court for an order to attach the debtor’s bank account. If approved, the bank is instructed by the court to set aside the dollar amount of the court-approved attachment for the benefit of the card company.
  
  

Time period for Enforcing the Judgment

• Each jurisdiction establishes its own statute of limitations period for the enforcement of judgments. The period varies from state to state and can range from five to 20 years. A credit card company with a judgment can seek a court order to attach the debtor’s bank account at any time prior to the expiration of the applicable statute of limitations period.