Debt Collection Continues Amid COVID-19 Lay-Offs

One major consequence of COVID-19’s devastation of the world economy is the countless individuals who have been laid off from their jobs, including those who are the sole income earners of their households. Despite the glaring interruption in people’s everyday finances due to the global pandemic, debt collection hasn’t been halted.

Now, groups everywhere, including organizations in New York, are demanding federal and state governments to put a freeze on private and public debt collection, including wage garnishment. Millions of U.S. workers have wages garnished from their paychecks every year due to consumer debt, which is already proving to be an issue for those who are no longer receiving a steady paycheck and are frantically looking for new jobs. Many companies and organizations have imposed hiring freezes amid the pandemic. Some representatives like Governor Cuomo of New York and Chicago Mayor Lori Lightfoot have already agreed to temporarily suspend state debt collection.

Unemployment benefits are an option for those who have lost their jobs, but individuals are reporting a delay in the online application system, as the unemployment office is now flooded with applications. In New York alone, the state labor department has reported receiving 159,000 calls one day, as opposed to the average 10,000 calls they receive pre-COVID-19.

Because nonwage garnishment pulls from individual bank accounts directly without warning, Americans are waking up finding that their accounts have been depleted. Americans who have defaulted on their federal student loans are also still experiencing wage garnishment. 45 million Americans owe more than $1.7 trillion in student loan debt today.

“I’m completely devastated. I have been out of work for over a week and have no idea how I’m going to feed my family now,” one person told the Guardian.

Though the U.S. has agreed to provide a $2 trillion stimulus package that will give taxpayers checks in the mail up to $1,200 per person, some who owe debts claim they will be receiving less than they would’ve before wage garnishment. It’s also still unclear as to when Americans can expect to receive this money.

What is Wage Garnishment?

Wage garnishment is one form of debt collection that occurs when a court orders that your employer holds a portion of your paycheck to send directly to the creditor. Nonwage garnishment occurs when creditors directly tap into your bank account. Debts that rely on wage garnishment include credit card and medical bills, child support and alimony, federal student loans, and taxes.

As a consumer, you have the right to be legally notified of the garnishment, and you can file a claim if the notice is inaccurate or you don’t believe you owe a debt. If your wages are being garnished even though you’ve paid off your debt, our lawyers are available to support your claim and represent your interests.

Passionate About Protecting Your Consumer Rights

At Atlas Consumer Law, our creditor harassment attorneys know that being in debt is already overwhelming – the last thing you need is for a debt collector to be contacting you constantly or even checking in with your loved ones. Through our trusted legal counsel, we can effectively put a stop to creditor harassment. Most people don’t know that they have basic consumer rights that must be defended at all costs. With a thorough knowledge of the Fair Debt Collection Practices Act (FDCPA), our lawyers can hold debt collectors responsible for their unlawful practices. We can personally handle all the details of your debt collector harassment lawsuit so you have one less thing to worry about.

Whether you’ve discovered an error on your credit report or are being called long after your debts have been repaid, our creditor harassment lawyers can help. Call Atlas Consumer Law at (312) 313-1613, or contact us online. We provide creative legal solutions for challenging issues.

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