A Detroit-area caller feared wage garnishment after appearing in court over a $7,000 credit card lawsuit.

Amber, an independent contractor, told "The Ramsey Show” she was summoned to court, where an attorney representing the creditor approached her with a proposed settlement she could not afford. She told the attorney she was in financial hardship, but the proposed settlement did not change.

"There's nothing on fire," personal finance expert Dave Ramsey told her. "Nothing's going to happen bad to you in the next 10 minutes," as he addressed the caller's concerns about timing and enforcement.

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What A Judgment Actually Triggers

Ramsey said that in states where wage garnishment is allowed, enforcement does not begin immediately after a court ruling. At least 30 days typically pass before any action can take place, and sometimes longer.

He said fear often leads people to agree to payment plans they cannot afford. Ramsey also said it was unusual for a settlement offer on a $7,000 credit card balance to come in close to the full amount. Based on his experience, he said similar cases often settle for less as negotiations continue.

"Their chances of actually collecting anything from you is statistically zero," Ramsey told her, saying creditors rarely recover money from judgments like the caller's.

He said many people in similar situations either file for bankruptcy or cannot be located, outcomes creditors already expect. As a result, he said, creditors may consider settlement offers rather than risk recovering nothing.

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Using A Lump Sum To Reset Negotiations

When Amber said she could raise about $2,000, Ramsey advised her to withdraw a court motion she had filed requesting installment payments, saying it locked her into an arrangement she could not sustain.

He then suggested offering the $2,000 as a lump-sum settlement and increasing the amount gradually if needed, while staying well below the full balance. He added that the court process itself was far less dramatic than many people expect, describing it as moving cases through a system that handles people one at a time.

"Taking a number at the deli," co-host George Kamel said.

Situations like court judgments and debt negotiations can extend beyond the immediate court process. Domain Money provides CFP professional-led financial planning for people earning $100,000 or more, including free strategy sessions.

Even without extraordinary wealth, having a clear path forward can still make room for stability and longer-term goals.

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