Even though the COVID-19 outbreak has brought life to a standstill for most Americans as the economy has ground to a halt, debt collectors continue to pursue wage garnishments against vulnerable Americans. Recent reporting by the Guardian reveals how far some debt collectors are willing to go to recover funds and the serious consequences their actions are having on families across the country.
The reporting revealed that recently unemployed workers had discovered their bank accounts had been drained due to the execution of wage garnishment orders during the midst of the coronavirus pandemic. In one instance, a New York woman, who had been laid off due to Governor Cuomo’s stay-at-home order, discovered that her bank account was thousands of dollars overdrawn due to a credit card debtor who had received a court order allowing them to garnish her wages. The woman claimed she was not aware of this order until she spent several hours on the phone with the creditor after her son came back from the grocery store and informed her that her debit card had been declined.
In another instance, it was reported that the US Department of Education was still actively collecting garnishments on at least one person’s Social Security Disability Income, which ultimately prevented her from buying groceries. This collection action was pursued even though most courts have found that social security income is exempt from collection.
Unfortunately, the federal stimulus checks most Americans are expected to receive may also be garnished by creditors. It is unclear right now under the rules of the stimulus whether the Federal Government will step in and give debtors some much-needed relief from what could amount to predatory collection efforts.
While some states have taken executive action to suspend foreclosure actions, as well as the payment of mortgages and rent, little has been done on the federal level to curtail the punishing weekly wage garnishment withdrawals that were ordered before the wide-spread shutdowns. And, with State and Federal courts limiting their dockets to emergency hearings, there are very few avenues for distressed debtors to seek any form of judicial relief.
Normally, the courts allow debtors to petition the court for relief due to a documented financial hardship, such as unexpected medical issues or the loss of employment. However, with courts shutting their doors for all but the most serious of matters, these petitions may fall on deaf ears due to the inability of courts to hear live testimony from the debtor that supports their request for relief.
Like all other aspects of the debt collection process, there are rules that creditors must follow to be in compliance with state and federal law. However, as has been reported, there are still instances of unfair and predatory collection efforts that are being pursued during this unprecedented public health crisis. And, with the current limitations of the judiciary due to the coronavirus, these acts may continue to escalate if there is no movement from the Courts or state and federal governments to protect these vulnerable consumers from these unjust collection actions.
If you have being harassed by a debt collector or are unsure of your rights, call us at Michigan Consumer Credit Lawyers at (248) 353-2882 for a free, no obligation consultation. You can also email us your questions to [email protected]. Visit us at www.micreditlawyer.com for more information.