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consumer protection laws do not protect debtors' accounts and wages from these predatory tactics, because they are outdated and out of touch with the reality that many Americans face today.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.