By Sarah Rosenthal
One in ten working adults in the U.S. between 35 and 44 years old is getting their wages garnished. That means their pay is being docked — often because of a lawsuit they never even knew about involving an old credit card, medical bill or student loan.
For those earning low wages and living paycheck to paycheck, their hard work is no longer enough to support their families and pay their rent, much less cover any unexpected expenses like emergency medical bills.
The bread and butter of our work in NYLAG’s Consumer Protection Unit is advocating for individuals sued for credit card debt. Much of this debt is no longer even owned by the original lender; it has been sold to third-party debt buyers for pennies on the dollar.
It’s not unusual for third-party debt collectors to mix up the names and sue the wrong person. Also, in a large majority of cases, the third-party debt buyer never properly serves notice of the suit to the borrower, so defendants are deprived of the opportunity to argue their case in court, and the third-party debt buyer wins a default judgment.
Once a creditor has that judgment, they can garnish the borrower’s wages for twenty years. During that time, the judgment continues to accrue interest, often doubling or tripling in size by the time the borrower learns that someone sued them to collect on a debt.
Most of the time, the collector doesn’t have the evidence they need to prove that the debt is actually owed. When the borrower has a NYLAG lawyer who can force the collector to prove the basic elements of the case, our clients can often succeed in court.
Abusive third-party debt collectors, as well as subprime auto lending and foreclosure scams, can only flourish when there aren’t lawyers keeping lenders honest and putting a stop to all the bad behavior and the scams. At NYLAG, we keep them honest.
Sarah Rosenthal is a Coordinating Attorney with NYLAG’s Consumer Protection Unit specializing in nursing home debt.