The Edmond Sun

Local News

October 11, 2013

Report: Debt protection varies widely by state

WASHINGTON — Depending on where you live, debt collectors may be legally entitled to take your entire paycheck, house or car and completely clear out your bank accounts.

Families in the District of Columbia have a better chance of holding on to their vehicles than those in Maryland and Virginia. Yet Washington residents could have 25 percent of their wages transferred to a creditor.

In a report released Thursday, the National Consumer Law Center surveyed the patchwork of state "exemption laws" meant to protect struggling families from losing everything to creditors. The advocacy group found that few places met its five basic standards for protecting consumers — preserving at least $1,000 in a bank account as well as barring creditors from seizing vehicles, household goods, homes and most wages.

Only Massachusetts and Iowa came close to meeting those standards, each receiving a B-plus grade. The District of Columbia earned a B-minus for its fairly strong consumer protections, while Maryland and Virginia both received D's.

The District of Columbia prevents creditors from seizing anyone's home, but Maryland only protects homes worth up to $6,000. That's $1,000 higher than Virginia's limit, according to the report.

"I can't compare our laws to other states, but we have taken major actions to ensure those laws are enforced and worked with the courts to reform their rules for these lawsuits," said Mark Kaufman, Maryland's commissioner of financial regulation. Officials in Virginia had not reviewed the report by press time.

Christopher Weaver, associate commissioner for banking in the D.C. Department of Insurance, Securities and Banking, said the agency "plans to confer with the District's consumer affairs department and the D.C. Council about better protecting families' wages."

In some states, weak exemption laws simply reflect a failure to update statutes on the books, said NCLC researchers. Pennsylvania, for instance, protects Bibles and sewing machines, but has no coverage for household goods of more than $300.

"Almost all states exempt a pair of cows and an ox, but they haven't exempted computers or a car that actually works," said Robert Hobbs, deputy director of NCLC. "This is a call for states to update these laws."

Federal laws, he noted, mainly address personal bankruptcy, leaving states to ensure that residents do not wind up destitute as they try to pay off their debts. Hobbs said some states are updating their laws in piecemeal fashion, protecting a larger portion of wages but not cars, for instance.

"It's sort of like squeezing a balloon. They might be protecting the car, but the money in the bank account to make the car payments is wiped clean," Hobbs said. "States should be comprehensive in providing a foundation for families."

Exemption laws come into play when a creditor wins a judgment against a consumer in court. Creditors can then take steps to seize wages or property to pay the debt.

Members of the $12.2 billion debt-collection industry are critical of the restrictions consumer organizations want to place on their business. Industry officials argue that NCLC and other advocacy groups should put more emphasis on financial literacy than absolving consumers of their obligations.

"NCLC neglects to include any mention of the personal responsibility of consumers to communicate with creditors and debt collectors to seek solutions," said Pat Morris, chief executive of the Association of Credit and Collection Professionals, a trade group.

He added: "NCLC goes right to the lowest common denominator to incite fear — legal action, garnishment and repossession — which are actions of last resort by creditors."

About 30 million Americans have an average of $1,500 in debt subject to collection, according to the Consumer Financial Protection Bureau. In the wake of the financial crisis, state authorities and advocacy groups became alarmed by the tactics used by some debt collectors to get consumers to settle their balances.

A 2011 report by Consumers Union found debt collectors filing an increasing number of lawsuits against borrowers without proper documentation. In some cases, companies were suing people over debts that were already paid or winning court judgments without proof that they owned the debt.

California authorities, for example, argue JPMorgan Chase flooded the courts with lawsuits against credit card holders based on flimsy evidence that cardholders were in default, says a lawsuit filed in May by the state's attorney general.

Federal regulators have been investigating whether the nation's biggest banks used flawed documents and incomplete records to collect on delinquent credit card debts. Meanwhile, a group of 13 state attorneys general is also looking into the actions of banks as well as companies that buy defaulted debt and collect the proceeds for themselves.

1
Text Only
Local News
  • Ekso 1.jpg Deer Creek students see bionic suit in action

    In 2010, a car accident left Guthrie resident Mary Beth Davis paralyzed from the waist down.
    In a few weeks, thanks to INTEGRIS Jim Thorpe Rehabilitation, determination and an Ekso Bionics suit, she will be walking across a stage to receive a college diploma from Oklahoma State University.
    Wednesday afternoon, Davis was at Deer Creek Middle School where students of teacher Jamie Brehm got to see Davis and the suit in action and learn about how it helps people live a fuller life.
    Brehm said the opportunity to have the demonstration fit perfectly with the testing schedule. Brehm said a bonus was having Davis with her inspirational story come to the school. In addition to graduating soon, Davis lives an independent life and she was recently crowned Ms. Wheelchair Oklahoma.

    April 23, 2014 1 Photo

  • clock edit.jpg Antique clock collection on display at Edmond Library

    In a world that’s often hurried and brief, the Sooner Time Collectors have nothing but time. Oklahoma chapter members of the National Association of Watch and Clock Collectors have provided antique pieces from personal collections to display at the Edmond Library until the end of April.
    Since the 1950s, Sooner Time Collectors have gathered to learn about the inner workings of clocks and to admire one-of-a-kind finds. Of interest to the community is their involvement with repairs for the Cowboy Hall of Fame clock and the UCO tower. They now have 35 members who meet monthly as a chapter of the 16,000-member NAWCC community across America and the world.

    April 23, 2014 1 Photo

  • Be on the lookout for termites

    Warming temperatures and spring rainfall means swarming conditions for the homeowners’ nemesis in Oklahoma — the termite.
    Termites are Mother Nature’s way of recycling dead wood, as well as aerating the soil and increasing its fertility and water percolation. They are an important food source for other insects, spiders, reptiles, amphibians and birds within the food web, and they are essential for the wellbeing of the environment.

    April 23, 2014

  • Betz handprint.jpg Central students organize ‘Take Back the Night’ to end sexual violence

    The University of Central Oklahoma’s National Organization for Women (UCO-NOW), Institute of Hope and the Violence Prevention Project will host a Take Back the Night (TBTN) march and rally to end violence, beginning 7 p.m. May 1 in Pegasus Theater in Central’s Liberal Arts building.
    TBTN events date back to the early 1970s and focus on eliminating sexual violence in all forms. Thousands of colleges, universities, women’s centers and rape crisis centers have sponsored TBTN marches throughout the country.

    April 23, 2014 2 Photos

  • Police investigate more home burglaries in Edmond

    Residents have reported an additional seven home burglaries to the Edmond Police Department the day after an equal number occurred, according to city records.
    Police spokeswoman Jenny Monroe said a detective is investigating the new incidents reported during the day on Tuesday. Monroe said similarities in them lead the agency to believe they are connected.
    Tuesday’s reported burglaries occurred in different areas including near the Covell-Coltrane intersection and south of 15th Street along Santa Fe. According to city records, they were reported at:

    April 23, 2014

  • earth day 7.jpg Central community learns about water conservation

    Edmond residents know about rain that falls from their roofs after a storm. Some may not know what kind of important role it plays in the nation’s water supply.
    Tim Tillman, the University of Central Oklahoma’s sustainability coordinator, said UCO has a tradition of innovation in sustainable practices. Tillman said Earth Day, first brought to the campus more than 20 years ago, began that tradition.
    During Tuesday’s Earth Day Fair, Jason Summers, a Coca-Cola account manager for on-premise sales, was giving away rain barrels and educating members of the Central Oklahoma community about the benefits of rain barrels.

    April 22, 2014 3 Photos

  • pic 2.JPG Energy secretary touts CNG fleet conversion

    Oklahoma Secretary of Energy and Environment Michael Teague said the state is leading the way in converting its fleet of vehicles to run on compressed natural gas.
    And, he adds, the state is working to get federal officials engaged in moving its fleet of vehicles in Oklahoma to use CNG.
    Teague made those statements Tuesday during a visit to Champion CNG, 13915 N. Harvey Ave. in Edmond. The visit also coincided with Earth Day.

    April 22, 2014 1 Photo

  • 3 Senate candidates say no to Sharia law

    Whether to deport non-citizen Muslim men in the U.S. who believe violence is justified by Sharia law was a question asked to three of the seven Republicans running for the U.S. Senate.
    The Oklahoma Conservative Political Action Committee hosted a debate recently in Oklahoma City. The office is being vacated by retiring U.S. Sen. Tom Coburn.
    Congressman James Lankford said Great Britain has experimented with allowing certain pockets of their nation to function under Sharia law.

    April 22, 2014

  • MS_weather graphic.jpg Local forecast includes multiple severe weather days

    Severe thunderstorms will be possible in the area Wednesday and during the weekend.
    The National Weather Service says severe storms are expected to develop near a dryline across western Oklahoma down into Texas late Wednesday afternoon. Primary concerns will be very large hail and damaging wind gusts.
    During the evening and overnight hours, the storms are expected to form a squall line and move east into central portions of the state. As this occurs, the main threat will become damaging straight-line winds.

    April 22, 2014 1 Photo

  • Authorities make 8th arrest in Logan Co. homicide

    Authorities have arrested an eighth suspect in a homicide which involved the discovery of a badly burned body along a Logan County road.
    On Jan. 31, firefighters were dispatched to a grass fire in a rural area located south of State Highway 33 between Langston and Guthrie, Logan County Sheriff’s Office Chief Deputy Richard Stephens stated in a previous report. While extinguishing the fire, firefighters discovered a badly burned male body, Stephens said.

    April 22, 2014

Featured Ads
NDN Video
Poll

Do you agree with a state budget proposal that takes some funds away from road and bridge projects to ramp up education funding by $29.85 million per year until schools are receiving $600 million more a year than they are now? In years in which 1 percent revenue growth does not occur in the general fund, the transfer would not take place.

Agree
Disagree
Undecided
     View Results