In recent years, debt collectors and collection agencies have dramatically
shaped the way debt is collected and the structure of the debt collection
process. They have employed more aggressive tactics by filing millions
of lawsuits to force debtors to pay and to gain access to debtors'
wages and bank accounts. These creditors and debt collectors use their
own resources to the disadvantage of impoverished debtors. Current consumer
protection laws do not protect debtors' accounts and wages from these
predatory tactics, because they are outdated and out of touch with the
reality that many Americans face today.
When the Consumer Credit Protection Act was passed in 1968, wage garnishment
was a rare event. Now, it has become extremely commonplace and new laws
must be passed to regulate this growing trend. Even if wages are not being
garnished or only partially garnished, consumers bank accounts could still
be fair game and subject to being wiped out, placing paychecks in a vulnerable
position. Some debtors who have fallen on hard times due to layoffs, medical
debt, or credit card debt can no longer afford to pay for groceries or
their electric bills. Garnishment hurts the working class the most, whose
income hovers around $26,000 a year. Even if debtors have borrowed responsibly,
the interests rates they face make it incredibly difficult to pay back
on the debt they owe. Sometimes, they are required to pay more than half
of what they had originally borrowed due to high interest rates.
Creditors and debt collectors seize every opportunity they can to maximize
their profits from the business of debt collection, explaining the exponential
growth in lawsuits against debtors. One main issue is the lack of representation
and knowledge that debtors face. In contrast to the streamlined process
that creditors utilize in seeking court intervention and resources, debtors
often bury their head in the sand or become overwhelmed. Even if they
do show up to court, they are not represented adequately. The debtors'
absence makes it easier for collectors and creditors to seize their assets.
If lucky, lawyers for debt collectors will sometimes ask for continuance
on cases if the debtor is taking time off to show up in court.
Many call for the revision of federal laws regulating debt collection,
because they are silent on tactics collectors utilize in cleaning out
debtors' bank accounts. Although some states have very comprehensive
and protective measures, others do not follow suit in passing statutes
that protect consumers. Even when laws are comprehensive, they can be
confusing to debtors who carry the burden of figuring how to protect their
assets. It is always best, to consult a lawyer about wage garnishment
and bank account levies.