Bill Introduced in House to Raise Garnishment Protections

A bill has been introduced in the House of Representatives that seeks to amend the Consumer Credit Protection Act and protect more of consumers’ wages from garnishment while also amending the Fair Debt Collection Practices Act to prevent collectors from taking any action, including making threats, of having consumers arrested or imprisoned in connection with the collection of a debt.

A copy of H.R. 9224, the Protecting Wages of Essential Workers Act of 2022 can be accessed by clicking here. The bill, which was introduced earlier this week by Rep. Alma Adams [D-N.C.] has been endorsed by the National Consumer Law Center and the Center for Responsible Lending.

If enacted, the bill would raise the amount of a consumer’s disposable income that can be protected from garnishment to $1,000 or 75 percent, whichever is greater. The current limit is $217.50, which is tied to the federal minimum wage. The amount that is protected would adjust annually, based on the Consumer Price Index.

Employees would also be protected from being fired in the event that multiple garnishment orders are entered against one individual.

“Debt collectors should not be allowed to push working people into poverty or grab the funds people need for necessities to support their families,” said Michael Best, staff attorney at the National Consumer Law Center, in a statement. “Debt collectors also can’t be allowed to take us back to the days of debtors’ prisons.”

About 7% of employees have a garnishment order against them, according to ADP, and 26% of consumers have a debt in collection.

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