There was a recent post about a conversation with a debt collection attorney concerning what he believed were, and were not, effective collection tools. I reported that this collection attorney did not find wage garnishment to be a good collection tool because wage garnishment often drove debtors into bankruptcy.
I received different opinion from another experienced collection attorney from the Tampa area who writes:
“I couldn’t disagree more with whomever disparaged wage garnishments. They are my number one collection tool in this economy. With jobs scarce, people cannot afford to quit and seek new employment which they would have done prior to the recession. I can usually stipulate most every contested wage garnishment or win evidentiary hearings on the head of household issue due to the difficulty in actually proving it. Furthermore, it is far easier to verify employment(thus ensuring a “hit”) verses a bank account which is hit or miss. I have no found bankruptcy to be an issue at all.”
This attorney’s opinion is consistent with my own experiences in bankruptcy practice. I have a few bankruptcy clients who say they are filing bankruptcy because their wages have been garnished, but I don’t find that wage garnishment is a primary cause of bankruptcy. Most bankruptcy debtors I deal with anticipate collection. In other words, most people file bankruptcy before a creditor gets a judgment which would subject their wages to garnishment. If a creditor attorney garnishes wages then in most cases the debtor cannot file Chapter 7 bankruptcy for one reason or another.