Citibank Wage Garnishment Stopped

Citibank is one of the largest banks in the country and pursues a heavy collection policy for their consumer credit card debt division. They often directly sue clients for debt owed and sometimes will sell the debt to debt buyers if they do not believe that it is worth pursuing the debtor, especially if they do not believe that the debtor has any assets or property. In this case, our client was sued directly by Citibank through Rubin and Rothman, a debt collection law firm that handles Citibank collection cases frequently. Our client never received service of the summons and complaint having moved around quite a bit. Citibank was able to obtain a default judgment against him for that reason. He only learned of the judgment when he received a wage garnishment letter from his job telling him that he had 20 days to resolve the situation before garnishment would begin.

Citibank likely chose to sue our client instead of selling the debt to a debt buyer because they knew where he worked and thought it would be easy to garnish his wages. Rubin and Rothman did find his job easily when attempting to enforce the judgment because our client works for New York City, an easy target. In New York, Citibank is able to garnish approximately 10% of the gross wages of a consumer. There would also be 9% judgment interest accruing on the total amount while the garnishment proceeds leading to a much higher total amount to be repaid. Although it is more difficult to defend against an original creditor like Citibank in court because they likely have promissory notes and a history of statements to prove that the debt is proper, vacating an improper judgment is still necessary as it reopens the case and keeps the burden on Rubin and Rothman to litigate the substantive issues. Citibank rarely wants to go through the lengthy process of litigation due to the cost involved which is why Rubin and Rothman contacted us in this matter to negotiate a settlement that reduced our client’s total balance by over 60% and allowed them to pay the settlement over 12 interest free months.