In Bill, Lawmakers Propose New Limits for Seizing Workers’ Pay Over Old Debts


Last week, two lawmakers introduced a bill to put new limits on what debt collectors can take from debtors’ paychecks and bank accounts.
News Story (NATIONAL)

Paul Kiel
ProPublica
July 12, 2016
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Tags: Consumer Protection, Debt Collection, Employment

Organizations mentioned/involved: Voices for Civil Justice


DETAILS

The WAGE Act would also limit what can be seized from debtors’ bank accounts. Most garnishments are through wage seizures, ProPublica has found, but bank account garnishments can be particularly devastating, leaving debtors with no money at all. Our analysis of Missouri court data found that most bank account garnishments hit debtors with only a few hundred dollars in their accounts.

“It really does put people into complete turmoil,” said Martha Bergmark, executive director of the nonprofit Voices for Civil Justice, which represents civil legal aid organizations across the country. “It’s a rolling disaster” with potential consequences in every aspect of a low-income debtor’s life, she said.

The bill would protect about $12,000 in a debtor’s bank account from garnishment, a level pegged to the federal poverty guideline for a single-person household.