Sunday, November 25, 2007

The Grinch Who Stole Thanksgiving

Occasionally, I am ashamed to be a lawyer. I hear about something one of my colleagues in the profession did and simply hang my head in shame for all of us.

It would seem that one of the largest financial companies in the nation is tightening up its credit. That means that more of their marginal clients are subject to collection actions. Collections are a necessary part of business and I have no problem with companies trying to get the money due them. I do collections myself occasionally.

But, there should be limits. For example, in Oklahoma you can only get 25% of a person’s paycheck on a garnishment. You can however, get everything in a checking or savings account. So, some enterprising lawyers for large finance companies are now waiting until a family deposits their paycheck for the period before seizing the checking account. That means that the lawyers get a good sized lump sum before they have to start collecting the balance a bit a time through forced payroll deduction. And, while I don’t know this, I would suspect that nearly all of that first seizure goes to pay attorneys fees.

The problem is that this is the kind of an event that can send a financially troubled family over the edge. If they have to go for a whole pay period with no income, they can’t pay their rent or mortgage payment, their car payments, their utilities or even buy groceries or medicine. They are literally broke and may have to go to payday lender or pawnshop just to feed their kids. And, that starts a new round of even higher percentage predatory lending.

As bad as this practice is, its’ impact is worst during the holidays. I got a call last week from a desperate woman whose checking account had been seized in this manner. There was simply no money in the house for anything, not even to feed her family. The same lender with the judgment from her personal credit also holds the mortgage on her home. So, that means that about Christmas she can expect a foreclosure notice.

I don’t believe that I could seize a family’s entire livelihood, especially a couple of days before Thanksgiving or Christmas. It’s just not in me. I would wait a few days or weeks and then simply file the paperwork and let the timing fall wherever it came out. I would never purposely wait for a paycheck to be deposited so that I could seize a higher percentage than the garnishment statute allows.

But, there is always an attorney out there who will. I once had an attorney seize a goodly portion of a family’s paycheck by garnishment. The family was already so poor that the only way they were eating was by food stamps and a church food pantry. The garnishment amount was all attorney’s fees. A member of their church agreed to loan them the money to get the garnishment lifted. As the check was being exchanged, the lawyer bragged that the money would be used for her and children to vacation in Florida. With representatives like these, it’s no wonder so many people hate lawyers.


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