An advocacy group in Indiana has issued a report highlighting “problems with the current collection process” and making a series of recommendations, including improving delinquency notice adequacy, accuracy, and timeliness.
The report was issued by the Indiana Institute for Working Families. The organization looked at complaint data filed with the Bureau of Consumer Financial Protection by individuals regarding debt collection companies.
The number of Indiana residents who have a debt in collection is slightly higher than the national average and the amount of debt held by Hoosiers is also above what most other individuals have, according to the report.
State laws in Indiana do not go far enough in protecting individuals, the report alleges, such as by not protecting enough of an individual’s assets from garnishment or levy, relative to other states. For example, Indiana’s garnishment level matches the “floor set by federal wage garnishment limitations,” while some states prohibit wage garnishment “outright,” according to the report. More than 10% of Indiana residents are currently having their wages or assets garnished to pay off an unpaid debt, according to the report.
The report makes a number of recommendations to help individuals and “improve the debt collection process.” Those recommendations are:
- Prevent predatory lending practices
- Improve delinquency notice adequacy, accuracy, and timeliness
- Reduce harassment
- Bolster financial literacy for youth and adults
- Ensure basic needs are met when wages are garnished