Old credit card debt, student loans or unpaid medical bills are catching up to many Americans. In fact, some employees in the U.S. may lose up to a quarter of their paycheck to collection efforts for unpaid debts.
The recession, underemployment and a reliance on credit cards to bridge the gap during difficult times resulted in a number of Americans taking on substantial debt. Thousands of dollars spent on credit cards to make ends meet or pay for an unexpected event soon ballooned into higher and higher payments with interest and fees tacked on.
Creditors and collectors have pursued struggling cardholders and other debtors in court, securing judgments that allow them to seize a chunk of even meager earnings. The financial blow can be devastating — more than half of U.S. states allow creditors to take a quarter of after-tax wages.
In a recent study conducted by ADP, one of the nations largest payroll services providers, it was discovered that an alarming 1 in 10 employees between the ages of 35-44 had their wages garnished in 2013. Child support accounted for roughly half of those surveyed, however a substantial number had wages garnished for consumer debts such as credit cards, medical bills and student loans.
ADP’s study went further to reveal that wage seizures were most common among middle-aged, blue-collar workers and lower-income employees. Nearly 5 percent of those earning between $25,000 and $40,000 per year had a portion of their wages diverted to pay down consumer debts in 2013. Perhaps due to the struggling economy in the region, the rate was highest in the Midwest.
If you are struggling with a difficult financial situation, seeking the assistance of an experienced bankruptcy attorney can help you find a strategy to protect you and your family. Contact the Law Offices of Charles E. Covey for help today.