5 ms·

People don't wake up one day and find their wages garnished. They must have a lawsuit filed against them, be served with a summons, get a judgment against them

People don't wake up one day and find their wages garnished. They must have a lawsuit filed against them, be served with a summons, get a judgment against them, and finally have their wages garnished. And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice.

shmerl 12y ago
Charging constant percentage on the debt is not called justice. It's a rip off.
- zo1 12y ago
  They agreed to it when they signed up for the debt. I don't get it, just because someone (corporation/rich person) has lots of money, doesn't mean that not giving them back what they gave you is okay. Not giving them back money that you took is the rip off. Is it nice? Could they be a little more compassionate to peoples' situations? Sure, of course. That's why you have institutions that help people with debt-counseling. On the other hand, why not do what they did here. Make laws that prohibit over-burdening debt from being given to an individual.
  - shmerl 12y ago
    "Agreed" because they had no choice. Profiting from other's debt is simply crooked, but became acceptable in society.
    - zo1 12y ago
      I'm not sure I understand what you're saying. What is your argument, exactly?
      - shmerl 12y ago
        You said that profiting from debt is alright since parties have agreed to it. I'm saying that it's not, and such agreement comes from limiting circumstances, not because it's a good practice.
        zo1 12y ago
        So could you boil down your argument for "limiting circumstances" for me, then? i.e. X is bad because Y, etc. Credit exists because different people/entities have different time preferences for money, which is a value differential. Sure, this can be influenced and skewed based on life-circumstance. e.g. one of the posters in this thread noted how "10,000" in debt helped them get through a very troubling time in their life and how they're very grateful they had access to it at the time. Are you going to say that it was "not okay" that the creditor helped him with that? Are you saying that they should have given him/her the money for absolutely no reason, no profit, nothing? Are you implying that lending is okay if it's for charity? What, really, I can't even fathom how you can hold your opinion as logically consistent.
        shmerl 12y ago
        Limiting circumstances is any case when people can't pay off the debt right away. For instance when buying living property which requires them to pay it off in 30 years because of insane pricing or simply when they have consumer debt like described in this article.
  - geebee 12y ago
    Fair enough - though to me, the question is just how much of my governments efforts, resources, and monopoly on physical force I'd like to devote to getting a creditor his or her money back. We can say to a debtor, maybe you shouldn't have taken that loan, sure. But can we say to a creditor, well, why did you make a large and completely unsecured loan to someone with dodgy credit at very high interest rates? Creditors need to be careful too. I do agree that this sort of thing is better handled with relatively lenient bankruptcy laws, and I do understand garnishment (through force of government) will have to be one of the functions of a court. So this is more about my general attitude, since I doubt we'd disagree much on the specifics here. I just don't have great innate sympathy to people who get upset about defaults when their business is making high interest unsecured loans to people with poor credit. They're welcome to do this, I just wouldn't want to see my government bend over backwards to help them.
- fennecfoxen 12y ago
  Charging some percentage on the debt (interest) is in fact just compensation for the time value of money, risk, and reasonable expenses incurred while pursuing the judgement. Money isn't free for lenders, either -- until their borrowed money is returned, they're incurring recurring costs. It's only a rip-off when they're empowered to charge interest in excess of that.
  - shmerl 12y ago
    In practice it's a rip off when people aren't able to pay off the debt, because lending entities simply constantly parasitically profit from that debt.
  - commandar 12y ago
    >It's only a rip-off when they're empowered to charge interest in excess of that. Which is what actually happens in reality.
smtddr 12y ago
>>And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice. I wouldn't describe a big CC corp bringing a citizen to near-financial-ruin as "justice". While you are probably factually right and all the legal procedures more or less followed, this article still highlights a problem with our current system. That it drains people who are already weak. Kicks 'em when they're down.
- themartorana 12y ago
  Exactly. Justice is hardly found in making it impossible for someone to pick themselves back up. It also seems odd to sue someone who may be behind on payments, but hasn't resorted to bankruptcy court to completely eliminate those debts (save college loans, which is a whole other thing). It's hardly surprising that people who have never been down on their luck are the first to turn a blind eye or scolding glance towards a fellow human who has fallen from grace. I'm not advocating for people not being responsible for their debts, but I am advocating for a caring society that helps people back up, not one that puts a boot on their throat. Also, just a personal grievance, is any bank garnishing wages from a tax payer that took tax payer money during the bail-out.
  - deleted 12y ago
    [deleted]
- hnal943 12y ago
  Of course the option is to not extend them credit at all so they avoid these Faustian deals. Of course, denying poor people access to credit is going to be politically unpopular.
  - jaynos 12y ago
    Not to mention, bad for the bottom line.
  - smtddr 12y ago
    And a financial disaster for CC companies because, let's face it, the whole credit system is significantly supported by exploitation of less fortunate people. If situations like this article describes didn't happen CC companies would be missing a lot of profit.
DanielBMarkham 12y ago
>>People don't wake up one day and find their wages garnished. Guess what? I woke up one day and found my wages garnished. Back in the day, when my kids were little, I broke up with my wife. I kept the kids. She did not. Due to a mix-up at child support, since I was the dad, they thought I was the one who left. So they started running up a bill. First I ever heard of it was when my boss told me to report to HR -- which threatened to fire me. I was behind in child support by over four thousand dollars. Took over 3 years to get the state government to pay me back. Hell, I was a deadbeat dad! (And people wonder why I'm a libertarian) But to your point, it takes two to tango, a creditor and a lender. The creditor is supposed to be the one taking the risk. That's why they charge you for borrowing money. It's not supposed to be a sure shot. Today in the states, however, the Republican-controlled Congress back in 04 passed something called euphemistically The Personal Responsibility Act or some other such horseshit and the credit card companies can chase you to the ends of the earth. Just like child support did with me. Look, I have no problem with people paying what they owe, as long as they can pay it, of course. But with this many people getting wages garnished, and the collections agencies getting more and more draconian? The social balance is off. We're making it so if you run a credit agency and lend out money, you're guaranteed something back. Aside from who's responsible for what, that's not the way we want the economy to work.
Someone1234 12y ago
> And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice. Not even close, take the example from the article, the debtor owed 110% of the original debt (7K Vs 15K) and that is with some payments in the interim. Is over 100% of the original debt "justice" or exploitation? With fees, fines, and other penalties rolling over (i.e. fines on fines on fines) and with no real limits, the system is set up to kick those who are down (often resulting in bankruptcy which nobody "wins"). Even if fines and fees were capped at 100% of the original debt (with only central bank interest being charged above that) I'd call that a win. I'd want to see a 50% cap ideally however (so 150%+interest has to be paid back, no more). The profits banks make on some debt is criminal right now. They don't get away with this in much of the EU, but the EU (and members) aren't shy to regulate consumer debt.
- bpodgursky 12y ago
  50% interest over how many years? I never ever hold a credit card balance but even I would not be able to turn down a capped loan over decades if I wasn't getting punished for it.
- zo1 12y ago
  "Is over 100% of the original debt "justice" or exploitation?" Would it make any difference to your reasoning if the individual was financially illiterate as opposed to financially educated? Because from my point of view, it's neither justice nor exploitation, but agreed and consensual contract. Now whether those individuals made a good decision to get into the contract is a different discussion entirely, and is why I ask the above question of you.
morganvachon 12y ago
It does happen out of the blue like that sometimes, though. A little over a decade ago, my biological father who lived in another state had died suddenly. Because I had been covered under his social security plan when I was a minor and had battled cancer into adulthood (resulting in a $400,000 bill), the remaining debt of nearly $100,000 ended up in my lap. The only way I found out was when my wages began to be garnished. It turned out that a judgement was entered against me in his state, not in mine, and I never got any notice of a court date. Of course, I couldn't show up if I didn't know about it (I didn't even learn of his death until months after, he had been out of my life for many years) so a default judgement was entered. The other state's court system somehow didn't have my home address but knew where I worked and how to garnish my paycheck. After speaking with a lawyer about it, I was told it would have ended up costing me tens of thousands of dollars and years of court battles with no guarantee of resolution. I ended up filing bankruptcy not long after due to the garnishment and other factors causing me to risk losing my house, and by some miracle the federal government allowed the judgement to be attached to the bankruptcy case.
- sjg007 12y ago
  Why were you responsible for his debt?
  - gretful 12y ago
    state laws sometimes pass the debt of a parent along to children who can pay it.
  - morganvachon 12y ago
    Technically it was my debt, but as a minor starting out it wasn't my legal responsibility. I went into the remission phase as an adult, and soon after all benefits stopped. A few years after that he passed away, and they came after me to recoup the balance due.

shmerl 12y ago

Charging constant percentage on the debt is not called justice. It's a rip off.

zo1 12y ago
They agreed to it when they signed up for the debt. I don't get it, just because someone (corporation/rich person) has lots of money, doesn't mean that not giving them back what they gave you is okay. Not giving them back money that you took is the rip off. Is it nice? Could they be a little more compassionate to peoples' situations? Sure, of course. That's why you have institutions that help people with debt-counseling. On the other hand, why not do what they did here. Make laws that prohibit over-burdening debt from being given to an individual.
- shmerl 12y ago
  "Agreed" because they had no choice. Profiting from other's debt is simply crooked, but became acceptable in society.
  - zo1 12y ago
    I'm not sure I understand what you're saying. What is your argument, exactly?
    - shmerl 12y ago
      You said that profiting from debt is alright since parties have agreed to it. I'm saying that it's not, and such agreement comes from limiting circumstances, not because it's a good practice.
      - zo1 12y ago
        So could you boil down your argument for "limiting circumstances" for me, then? i.e. X is bad because Y, etc. Credit exists because different people/entities have different time preferences for money, which is a value differential. Sure, this can be influenced and skewed based on life-circumstance. e.g. one of the posters in this thread noted how "10,000" in debt helped them get through a very troubling time in their life and how they're very grateful they had access to it at the time. Are you going to say that it was "not okay" that the creditor helped him with that? Are you saying that they should have given him/her the money for absolutely no reason, no profit, nothing? Are you implying that lending is okay if it's for charity? What, really, I can't even fathom how you can hold your opinion as logically consistent.
        shmerl 12y ago
        Limiting circumstances is any case when people can't pay off the debt right away. For instance when buying living property which requires them to pay it off in 30 years because of insane pricing or simply when they have consumer debt like described in this article.
- geebee 12y ago
  Fair enough - though to me, the question is just how much of my governments efforts, resources, and monopoly on physical force I'd like to devote to getting a creditor his or her money back. We can say to a debtor, maybe you shouldn't have taken that loan, sure. But can we say to a creditor, well, why did you make a large and completely unsecured loan to someone with dodgy credit at very high interest rates? Creditors need to be careful too. I do agree that this sort of thing is better handled with relatively lenient bankruptcy laws, and I do understand garnishment (through force of government) will have to be one of the functions of a court. So this is more about my general attitude, since I doubt we'd disagree much on the specifics here. I just don't have great innate sympathy to people who get upset about defaults when their business is making high interest unsecured loans to people with poor credit. They're welcome to do this, I just wouldn't want to see my government bend over backwards to help them.
fennecfoxen 12y ago
Charging some percentage on the debt (interest) is in fact just compensation for the time value of money, risk, and reasonable expenses incurred while pursuing the judgement. Money isn't free for lenders, either -- until their borrowed money is returned, they're incurring recurring costs. It's only a rip-off when they're empowered to charge interest in excess of that.
- shmerl 12y ago
  In practice it's a rip off when people aren't able to pay off the debt, because lending entities simply constantly parasitically profit from that debt.
- commandar 12y ago
  >It's only a rip-off when they're empowered to charge interest in excess of that. Which is what actually happens in reality.

smtddr 12y ago

>>And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice. I wouldn't describe a big CC corp bringing a citizen to near-financial-ruin as "justice". While you are probably factually right and all the legal procedures more or less followed, this article still highlights a problem with our current system. That it drains people who are already weak. Kicks 'em when they're down.

themartorana 12y ago
Exactly. Justice is hardly found in making it impossible for someone to pick themselves back up. It also seems odd to sue someone who may be behind on payments, but hasn't resorted to bankruptcy court to completely eliminate those debts (save college loans, which is a whole other thing). It's hardly surprising that people who have never been down on their luck are the first to turn a blind eye or scolding glance towards a fellow human who has fallen from grace. I'm not advocating for people not being responsible for their debts, but I am advocating for a caring society that helps people back up, not one that puts a boot on their throat. Also, just a personal grievance, is any bank garnishing wages from a tax payer that took tax payer money during the bail-out.
- deleted 12y ago
  [deleted]
hnal943 12y ago
Of course the option is to not extend them credit at all so they avoid these Faustian deals. Of course, denying poor people access to credit is going to be politically unpopular.
- jaynos 12y ago
  Not to mention, bad for the bottom line.
- smtddr 12y ago
  And a financial disaster for CC companies because, let's face it, the whole credit system is significantly supported by exploitation of less fortunate people. If situations like this article describes didn't happen CC companies would be missing a lot of profit.

DanielBMarkham 12y ago

>>People don't wake up one day and find their wages garnished. Guess what? I woke up one day and found my wages garnished. Back in the day, when my kids were little, I broke up with my wife. I kept the kids. She did not. Due to a mix-up at child support, since I was the dad, they thought I was the one who left. So they started running up a bill. First I ever heard of it was when my boss told me to report to HR -- which threatened to fire me. I was behind in child support by over four thousand dollars. Took over 3 years to get the state government to pay me back. Hell, I was a deadbeat dad! (And people wonder why I'm a libertarian) But to your point, it takes two to tango, a creditor and a lender. The creditor is supposed to be the one taking the risk. That's why they charge you for borrowing money. It's not supposed to be a sure shot. Today in the states, however, the Republican-controlled Congress back in 04 passed something called euphemistically The Personal Responsibility Act or some other such horseshit and the credit card companies can chase you to the ends of the earth. Just like child support did with me. Look, I have no problem with people paying what they owe, as long as they can pay it, of course. But with this many people getting wages garnished, and the collections agencies getting more and more draconian? The social balance is off. We're making it so if you run a credit agency and lend out money, you're guaranteed something back. Aside from who's responsible for what, that's not the way we want the economy to work.

Someone1234 12y ago

> And the money that is being garnished is to pay back the creditor for the money and/or services that the debtor received. It's called justice. Not even close, take the example from the article, the debtor owed 110% of the original debt (7K Vs 15K) and that is with some payments in the interim. Is over 100% of the original debt "justice" or exploitation? With fees, fines, and other penalties rolling over (i.e. fines on fines on fines) and with no real limits, the system is set up to kick those who are down (often resulting in bankruptcy which nobody "wins"). Even if fines and fees were capped at 100% of the original debt (with only central bank interest being charged above that) I'd call that a win. I'd want to see a 50% cap ideally however (so 150%+interest has to be paid back, no more). The profits banks make on some debt is criminal right now. They don't get away with this in much of the EU, but the EU (and members) aren't shy to regulate consumer debt.

bpodgursky 12y ago
50% interest over how many years? I never ever hold a credit card balance but even I would not be able to turn down a capped loan over decades if I wasn't getting punished for it.
zo1 12y ago
"Is over 100% of the original debt "justice" or exploitation?" Would it make any difference to your reasoning if the individual was financially illiterate as opposed to financially educated? Because from my point of view, it's neither justice nor exploitation, but agreed and consensual contract. Now whether those individuals made a good decision to get into the contract is a different discussion entirely, and is why I ask the above question of you.

morganvachon 12y ago

It does happen out of the blue like that sometimes, though. A little over a decade ago, my biological father who lived in another state had died suddenly. Because I had been covered under his social security plan when I was a minor and had battled cancer into adulthood (resulting in a $400,000 bill), the remaining debt of nearly $100,000 ended up in my lap. The only way I found out was when my wages began to be garnished. It turned out that a judgement was entered against me in his state, not in mine, and I never got any notice of a court date. Of course, I couldn't show up if I didn't know about it (I didn't even learn of his death until months after, he had been out of my life for many years) so a default judgement was entered. The other state's court system somehow didn't have my home address but knew where I worked and how to garnish my paycheck. After speaking with a lawyer about it, I was told it would have ended up costing me tens of thousands of dollars and years of court battles with no guarantee of resolution. I ended up filing bankruptcy not long after due to the garnishment and other factors causing me to risk losing my house, and by some miracle the federal government allowed the judgement to be attached to the bankruptcy case.

sjg007 12y ago
Why were you responsible for his debt?
- gretful 12y ago
  state laws sometimes pass the debt of a parent along to children who can pay it.
- morganvachon 12y ago
  Technically it was my debt, but as a minor starting out it wasn't my legal responsibility. I went into the remission phase as an adult, and soon after all benefits stopped. A few years after that he passed away, and they came after me to recoup the balance due.