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Consumer debts leading to wage garnishments nationwide

Pennsylvania readers might be interested to learn that, according to ProPublica and National Public Radio, 10 percent of working people in the U.S. aged 35 to 44 are subject to wage garnishment. Many of the garnishments are because of student loans, medical or credit card debt.

Federal law protects the lesser of 75 percent of an employee's earnings or the amount that would be earned for 30 hours of work at the federal minimum wage per week. Pennsylvania, though, is among four states that offer greater protection; it has effectively banned wage garnishment for most types of debt. But that doesn't stop collectors from pursuing consumers with collections calls and other efforts.

Because there is no national data available, ProPublica requested data from ADP, the largest payroll services company in the U.S., regarding wage garnishment. ADP thereafter released a report indicating that, among employees aged 35 to 44, approximately half of wage garnishments resulted from outstanding child support. Among those in that age group earning between $25,000 and $40,000 annually, though, wage garnishment for consumer debt was more common than for child support. Extrapolated nationwide, the ADP report suggests that up to 4 million American workers are subject to wage garnishment for consumer debt.

Debt collectors may also attempt to seize funds from a person's bank accounts. There is no data on the frequency of the practice, but those who were interviewed by ProPublica and NPR often said their creditors had at least attempted such a seizure. Those who are dealing with creditor harassment or who anticipate a lawsuit for debt collection may wish to consult an attorney with experience in consumer debt matters. A bankruptcy attorney may be able to suggest legal options to reduce or eliminate debt or to stop creditor calls. In a situation where a person has been or is being sued because of credit card debt, an attorney may be able to help by examining the facts of the case and drafting and filing an answer to the complaint.

Source: NPR, "Millions Of Americans' Wages Seized Over Credit Card And Medical Debt", Chris Arnolds and Paul Kiel, September 15, 2014

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