Federal, state and local officials have all taken steps to protect Americans from the economic crash caused by COVID-19. Governor Ron DeSantis – if somewhat grudgingly – has extended a moratorium on evictions and foreclosures first signed in April through August 1st. Congress temporarily halted collections on student loans. The CARES Act blocks the IRS from taking money from your tax refund or stimulus check for back taxes.
But one of the most aggressive and common forms of debt collection has been allowed to continue: seizure of wages for old consumer debts. As a result, anyone with credit debt lucky enough to keep their job is still at risk of losing part of their paycheck.
The main protection Americans have from collection agencies during the pandemic has been inadvertent – state courts have been closed to most hearings. But some major debt collectors have been filing suits in the thousands, according to a ProPublica review of online court records from county and state court websites. When the courts reopen, these companies will be first in line to win new judgments.
With 48 percent of American households experiencing unemployment in the past few months, many will have no wages to take. But debt collectors will be there waiting when they do.