17 Feb Has Your Social Security Or Pension Been Garnished By A Debt Collector?
I recently consulted with a distraught older couple whose bank account had been wiped out by a debt collection law firm. The debtors knew about a judgment that the debt collection law firm had obtained but had been unable to reach a re-payment schedule agreement with the law firm.
The next thing they knew, there was no money in the bank account. The couple had talked to the law firm and told the law firm representative that the only income available was social security and pension funds. The law firm’s garnishment of those funds was a violation of the Fair Debt Collection Practices Act as those funds are exempt from garnishment.
How? Because section 1692e(4) and (5) state as follows:
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
4) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.5) The threat to take any action that cannot legally be taken or that is not intended to be taken.
Because social security is exempt (and under most states’ laws, so is a pension payment), the garnishment of those funds may be illegal and the debtor who has lost their money may have recourse against the creditor.
See an attorney in your state to fully explore the possibilities of a lawsuit against that creditor.
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