Millions of Americans struggle with old debts they can’t pay back,
and live with the uncertainty of knowing that at any moment, they could
have their bank accounts or wages seized by collectors.
ProPublica has spent years gathering data on how often debt collectors use the courts
to secure judgments against debtors – a tactic that affects millions
of Americans. They sought to find out who is filing lawsuits, how many
lawsuits are being filed, and who is being sued.
Here’s what they found out:
- In 2013, four million Americans has their wages garnished over consumer debts
- Workers earning between $15,000 and $40,000 a year were most likely to
have their wages garnished
- Black communities are typically hit much harder by debt collection lawsuits
than white communities, even with similar incomes
- Some public and nonprofit hospitals have been known to collect from patients
who can’t pay their medical bills – even when they qualify
for financial aid
- Capital One sues its customers more than any other bank, including during
the last major recession
- One subprime lender seized wages from active-duty soldiers when they defaulted
on overpriced loans
- Debt buyers are mostly responsible for the increase in lawsuits –
in fact, in most courts, debt buyers filed more suits than any other type
- Defendants are largely not represented by attorneys in debt collection lawsuits
- Suits against residents of lower-income black neighborhoods were much more
likely to result in judgments than lawsuits against residents of white,
- Where debtors live matters as least as much as what race they are
- Debt collectors who obtain a judgment often clean out debtors’ bank
accounts – in cases where the account is worth less than what is
owed, debt collectors can seize every penny
What can be done? Major companies who are flooding our nation’s already
overburdened court system with lawsuits are not getting the scrutiny they
deserve. The last federal law limiting garnishments was passed in 1968
and is now clearly out of date. As a step in the right direction, Missouri’s
attorney general has suggested several commonsense reforms in December.
If these reforms pass, the process would become fairer for debtors. The
collection industry has supported these measures, and changes may be on
Sulaiman Law Group, LTD has helped numerous debtors find relief in Chicago.
If you are struggling with old debt or are facing a collections lawsuit,
please contact our firm to schedule a free initial case evaluation.
Our office can be reached at (312) 313-1613.