NPR's Chris Arnold On Garnished Wages

Kevin Evans relaxes in his small apartment after arriving home from work. Evans, who lost income and his home in the recession, is now having his wages garnished after falling behind on his credit card payments. (AP)
Kevin Evans relaxes in his small apartment after arriving home from work. Evans, who lost income and his home in the recession, is now having his wages garnished after falling behind on his credit card payments. (AP)

NPR News' business correspondent Chris Arnold took part in a remarkable investigative reporting project with ProPublica, tackling the alarming growth of wage garnishing as a method used by banks and lenders to repay outstanding personal debt. It's a quiet, and costly problem, and Arnold gave us a great rundown of his reporting today on our show.


Editor's Note: We're trying out a new transcription service this month. These transcripts, while not 100% accurate, are pretty close, and we want your thoughts on their usefulness / relevancy. Let us know in the comments below, or send us a note at

JANE CLAYSON: The word garnish brings to mind an extra flourish on a thoughtfully cooked meal. For creditors, to garnish your wages means taking a nice chunk — in some states up to twenty  five percent — of after-tax wages to pay down debts. Sometimes, the money is taken directly out of the bank account. It can come as a severe blow to people  trying to get to just make ends meet. Joining me now from Boston is NPR correspondent Chris Arnold. He teamed up with ProPublica's Paul Kiel for the new series, "Unforgiven: The Long Life of Debt." Nice to have you with us.,Chris. Thanks for taking the time.

CHRIS ARNOLD: Absolutely. Hi Jane.

JANE CLAYSON: Can you define what it means to have your wages garnished, exactly?

CHRIS ARNOLD: Sure. And so what this means is that someone you owe money to, usually
it's a debt collector that does this that has a lawyer,  they will sue you in court, and say "Jane owes us money." And often what happens here though is that the person who's being sued to get served with papers a big stack of papers, and then somewhere in there, it says, "Hey, there's this court hearing. And you should go." A lot of the time — in parts of the country it went to more than half the time — the debtors don't actually show up and that results in a default judgment against them. And when that happens, the creditors, the credit card companies or hospitals or whomever is suing get broad powers to garnish wages, Which means, your employer has to give up to twenty five percent of your paycheck to the debt collector. And there is no protection for your bank account. So in in many, many states across the country, they can take everything in your checking account if they can figure out where your bank is and do that.

JANE CLAYSON: So by law then, Chris, who can garnish your wages? Is it just debt collectors and creditors?

CHRIS ARNOLD: Well this is interesting, and this is what is new. Just about anybody can do it if if they file suit. But for decades, wage garnishment has been used by the courts to make sure that fathers pay child support. It was the whole you know, deadbeat dad saying. Or the government, if you owe taxes, they have ways of garnishing your wages and then that's still a big chunk of it. But what's new here is that nobody understood how much is just going out for just regular old consumer debt, like credit cards, medical bills, and even national experts that we talk to they say that they were taken aback by by what we found here.

JANE CLAYSON: So give us an example. Share a story of someone in this position.

CHRIS ARNOLD: Ok, well one person we could talk about — I'm flipping through my notes here — is a woman named Kasandra Rose who lives in Omaha, Nebraska. She and her husband are in  their thirties and they have two kids. You know, they try and get by, the recession was tough on them, her husband lost his job for a while. And along the way, she starts getting just these debilitating headaches where, you know, it's scary kind of stuff. She's falling down. It goes on for months and they don't have health insurance. And she's saying, "I don't want to go to the hospital. Paul, her husband, finally says. "Look a friend of mine, he died of an aneurysm. You have got to go." You know you can imagine this sort of dramatic conversation that I'm sure plays out in lots of households around the country. So she goes to the hospital. They say, "Well,this could be a brain tumor." There is an M.R.I. done, all these test,s and then all of a sudden, literally overnight, you know, when she gets out of the hospital, they say, "Well, it looks like it's just migraines." But she owes twenty thousand dollars for M.R.I. bills and other stuff. And figures, "Why? I can't, you know, pay that. I can barely pay for the dentist for my kids." You know, so she doesn't pay it. And before she knows it, all of a sudden, twenty five percent of her paycheck's being taken by by creditors that the hospital sued her through or through a debt collection company.

JANE CLAYSON: So does she have any recourse in the process?

CHRIS ARNOLD: Not really. I mean a lot gets lost if the creditor, or if the debtor, sorry, doesn't show up in court at that hearing. I mean there's a hearing, there's a judge, you know and for whatever reason for a bunch of different reasons people don't show up. Whether they  figure it's hopeless, or they never really understand that that's even a possibility to go to the courts. So you know when that happens there's this default judgment, and then it's a court order: her employer has to take the money out of her paycheck. From there, if you owe  twenty thousand dollars, that that could go on for for years and years and years. And you know one recourse might be bankruptcy. That has always been a way that people who are just getting crushed by debt can...was sort of the answer to debtor's prison, you know, and this is something we used to have back in England and stuff. But a lot of these people we talked to said, "Look.  I don't even have the three thousand dollars to hire a lawyer to declare bankruptcy. So I can't even afford bankruptcy."

JANE CLAYSON: Chris Arnold is a correspondent for NPR. He teamed up with Pro Publica's Paul Kiel for this new series "Unforgiven: The Long Life of Debt." How many people are experiencing this,Chris? how many people are having their wages garnished? How widespread is this now?

CHRIS ARNOLD: Well this is really interesting, too. And there were no good national numbers about this before we did this this series. And Paul Kiel, my partner, went to A.D.P., which is a big payroll company — and this was a really smart move, because they deal with millions and millions of employees in their paycheck, so  they could look at a sample of thirteen million Americans and extrapolate from that. And what they found is that one in ten working Americans between the ages of thirty five and forty four are getting their wages garnished. And that's just a huge percentage of the population, obviously. And nearly half the time,that's over credit card debt now, in medical bills or student loans. So there's been real sea change in how debt collectors are using the courts here to collect debts.

JANE CLAYSON: Has there been any legislation to this point?

CHRIS ARNOLD: Well, consumer advocates are saying, "There needs to be more than a big law that
oversees a lot of this goes all the way back to 1968." And apparently there was a fight between the Senate and the House and you know, some people wanted a lower threshold and twenty five percent of people's wages. But the idea was for states' rights and the States will comein, and you know, they'll pass tougher protections for folks. So that ended up being this very arguably high level and then getting you know a quarter of the pay taken and week after week month after month. Most people can survive that. You know, surveys from the Fed show that those people can't scrape together four hundred bucks to fix their car. So now that only about half the states ever went forward and created their own laws that would offer better protections for folks so, there's a feeling out there that's "OK if this this is, I mean, this many people, maybeit's time that that the laws changed."

JANE CLAYSON: Right. One in ten. I mean you as you say this is becoming complicated for national employers who now have to navigate the different laws in different states.

CHRIS ARNOLD: Right. Yeah. Big employers and small employers, whenthey're small business owners who say, "Look if I mess this up, I don't know how to deal with a wage garnishment." But if they do it wrong, then the small business owner can get held accountable for a debt. Some guy bought a laptop computer and never paid. And now the grocery store owner is supposed to pay it and it gets a little crazy and complicated but all you get is there are there lots of different parties that are being affected.

JANE CLAYSON: And if an employer does not correctly handle the garnishment order, they can actually become liable for for a portion of the debt, or even all of it. Is that correct?

CHRIS ARNOLD: Yeah exactly.

JANE CLAYSON: And so tell us, just in wrapping up here, what did you learn. What does the average person need to know about wage garnishment?

CHRIS ARNOLD: Well I had one giant take away was if you know, you get stuck in a place where suddenly you can't pay your bills, and people are coming after you. If you get something in the mail that says "Look, there's a court hearing." Show up. Appeal to the judge, ask what your options are. Try to get a lawyer. There are ways to push back against this but if people bury their head in the sand, a lot of bad things can happen.


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