Georgia Laws Let Debt Collectors Push Families into Poverty as Pandemic Protections Expire

National Consumer Law Center’s 50-State Review: Georgia Receives an F Rating; Consumer Protections from Debt Collectors Need Major Reform

ATLANTA – With millions of families struggling to recover from economic fallout of the COVID-19 pandemic, and state and federal eviction and utility shut off moratoriums coming to an end, Georgia has a vital role in protecting households from seizure of essential wages and property to pay old debts.

Every state has a set of exemption laws, intended to prevent creditors from pushing families into destitution. But a new report from the National Consumer Law Center, No Fresh Start 2021: Will States Let Debt Collectors Push Families into Poverty as Pandemic Protections Expire?, which surveys the exemption laws of the 50 states, the District of Columbia (D.C.), Puerto Rico, and the Virgin Islands that protect wages, assets in a bank account, and property from seizure by creditors, finds that Georgia’s exemption laws fail to meet even the most basic standards.

“Annual garnishment cases have risen by over 10,000 since 2016,” said Liz Coyle, executive director of Georgia Watch. “Without stronger protections, garnishment will remain a rising issue for Georgians facing exploitative debt collection actions.”

State exemption laws are a fundamental safeguard designed to protect consumers and their families from poverty, and to preserve their ability to be productive members of society and achieve financial rehabilitation. These protections are particularly important as families struggle to regain financial stability as pandemic protections expire. Yet Georgia fails to meet five basic standards:

●     Preventing creditors from seizing so much of the debtor’s wages that the debtor is pushed below a living wage;

●     Allowing the debtor to keep a used car of at least average value;

●     Preserving the family’s home—at least a median-value home;

●     Preserving a basic amount in a bank account so that the debtor’s funds to pay essential costs such as rent, utilities, and commuting expenses are not cleaned out; and

●     Preventing seizure and sale of the debtor’s necessary household goods.

“In Georgia and other states with weak exemption laws, families will face a wave of debt collector lawsuits that force the seizure of wages and essential property,” said Carolyn Carter, associate director at the National Consumer Law Center. “Weak exemption laws will impede economic recovery and exacerbate the racial wealth gap.”

By updating our exemption laws, Georgia can prevent creditors and debt buyers from reducing families to poverty. These protections also benefit society at large, by helping families regain their financial footing and contribute to the economy, keeping workers in the workforce, helping families stay together, reducing the demand on funds for unemployment compensation and social services, and keeping money in local communities where it will aid economic recovery.

Download the full report, state maps and state-specific information: https://www.nclc.org/issues/report-still-no-fresh-start.html

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Founded in 2002, Georgia Watch is a statewide, non-profit consumer advocacy organization working to inform and protect Georgia consumers on matters that significantly impact their quality of life, including the effects of predatory business practices, the high cost of utilities and healthcare, and restricted access to the civil justice system.

The nonprofit National Consumer Law Center® (NCLC®) works for economic justice for low-income and other disadvantaged people in the U.S. through policy analysis and advocacy, publications, litigation, and training.