September 30, 2014

Wage Garnishment Trend

Wage garnishment used to be all the rage for child support; lately it has been trending for consumer debt collection, especially within the 35 to 44-aged set.

A new study by National Public Radio and ProPublica shows that one in ten American employees between the ages of 35 and 44 have a lighter paycheck due to wage garnishment, and for those earning $25,000 to $40,000 a year, more than half that population are being garnished for consumer debt (not child support).

In Florida, debt collectors can take up to 25% of your net pay for things like old credit card debt, medical bills, and/or student loans.

Debt collection is big business. Debt-buyers purchase delinquent accounts for pennies on the dollar. For the debt-buyer it is a numbers game—often a BIG numbers game because many consumers are not aware of their rights or how to assert them and do not defend their case at the hearing (if they attend at all).

Furthermore, the debt-buyers purchase a spreadsheet of data without verification that the information is correct. The debt-buyer does not know if the consumer owes anything or not, or how much. They will not collect on every account, but they collect on plenty of accounts to make the practice a profitable business model.

If you sit on your consumer rights you will lose them.

Everyone should pay their bills, but you have to be able to stay in your home, feed yourself, and put gas in your car. (Can you do that if 25% is taken out of your paycheck?) That is why certain incomes are eligible for exemption—but you have to claim your exemption.

Wage garnishment is one way to pay back your credit card debt, but before you hand over 25% of your net income, you may want to consider your legal options.

Just because you are in debt does not mean you lack rights.

Seek competent legal advice to learn more about exemptions from judgment. (You do not need an appointment to pick up a pamphlet at Legal Aid about collection exemptions and how to claim them.) St. Johns Legal Aid is located at 222 San Marco Avenue in St. Augustine and they are open 8:30 a.m. to 5:00 p.m. every business day.