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Economy and Business

Ohio receives failing grades in debt collections report
The Columbus Dispatch says the report criticizes the lack of a living wage.

National Consumer Law Center (NCLC) is a nonprofit organization that fights "for consumer justice and economic security for low-income and other disadvantaged people, including older adults, in the U.S."
Courtesy of National Consumer Law Center
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Ohio is coming under fire from the National Consumer Law Center for policies that allow debt-collectors and creditors to push Ohioans into poverty when they default on debt. 

The state got two "F" grades in the study. One was for protecting only the federal minimum of 75 percent of wages from garnishments to pay debts. The state also got a failing grade for protecting less than $450 in a bank account from seizure. 

Ohio got a "D" for its policy that allows vehicles valued at more than $3,450 to be repossessed. 

Mark Schiffman is a spokesman for Minneapolis-based debt collection agency ACA International. He says debt collectors are not the enemy of consumers— they are just doing their jobs.

Hear Schiffman's opinion on debt collectors

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“All we ask is that these laws and regulations around consumer debt collection are fair and balanced,” Schiffman said. “They have to be able to protect consumers, but they also have to be able to allow the collection of rightfully owed debt.”

 Ohio does protect $125,000 in home equity after a change in state law in March. Because of that, the state received a "B" in that category. 

Ohio’s overall score on the report was a “C,” along with 23 other states.

The Consumer Law Center wants Ohio and other states to do more to protect families' ability to meet their basic needs when faced with debt.

Under current policies, a minimum-wage worker would have to live on $235 a week after wages are garnished.

Linda Cook is the senior staff attorney at the Ohio Poverty Law Center in Columbus. She says Ohio needs to update its collection laws to fit the reality of the economy.

Cook on what the state should do
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“Ohio needs to recognize that during these economic times— given the continued, high unemployment rate and the under employment rate and the fact that most new jobs are being created at lower wage levels— we need to be more realistic about the expectations we place on people for being self-sufficient,” Cook said.

The report suggests states, including Ohio, increase the share of someone’s wages that are protected from garnishment. It also wants states to change limits on vehicle values and bank accounts.

And debt collectors would be prohibited from seizing necessary household goods. Advocates say that without vehicles to get to work, debtors actually become less likely to repay.

The National Consumer Law Center is a nonprofit advocacy group. 

Listener Comments:

Strategic Defaulters in non real estate defaults are treated better than Involuntary Defaulters by the courts. Until this is fixed, things will only get worse.

Until Involuntary Default pleadings are accepted by the courts so judges can move to freeze all future interest rate charges, penalties and fees on a default, things will only get worse.

Likes Debt Suspension Rights on facebook, it's free.

Posted by: Debt Suspension Rights for Consumers, where are they? (California) on November 3, 2013 5:11AM
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