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Credit card debt may jeopardize Tennessee workers' jobs

Tennessee consumers struggling with credit card debt may be at risk for wage garnishment. When that happens more than one time, a consumer may also find that his or her job is in danger.

A stockbroker recently learned this lesson the hard way. The man's unpaid credit card debts of $21,721.17 and $10,957.66 were entered as wage garnishment judgments against him. His creditors then sent documents to his employer, requesting the garnishments. When that happened again six months later -- for additional judgments for credit card bills totaling $54,000 -- the man was fired shortly thereafter.

Federal law -- Title III of the Consumer Credit Protection Act -- offers protection against job termination on the basis of wage garnishment brought by one creditor collecting on a single debt. The CCPA also limits the amount of an employee's earnings that may be garnished.

In this case, the man's credit card debt was especially an issue because of his occupation: Brokers have to be registered by the Financial Industry Regulatory Authority, which may require disclosure of such wage garnishment judgments. Since the man failed to tell either his supervisors or FINRA about his unpaid bills, he may have violated his professional obligations.

Yet when a worker's pay is separately garnished by multiple creditors or for multiple debts, the CCPA's protections may not apply, and an employee's job might be in jeopardy. In the event the employee is fired, there may be little basis for challenging the termination because debt status is not a protected category under federal anti-discrimination law.

Fortunately, there may be alternatives available. An experienced bankruptcy attorney can advise consumers with credit card debt of various options. For example, wage garnishments do not include voluntary wage assignments, where an employee voluntarily agrees that their employers may turn over an agreed-upon amount of their earnings to creditors.

Source: Time, "Yikes - When Debt Costs You a Job," Martha C. White, Sept. 17, 2012

  • Our firm handles situations similar to the one discussed in this post. If you would like to learn more about our practice, please visit our Memphis Credit Card Debt page.

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