Wage Garnishment by the Federal Government Due to Medical Bills
Medical bills are often a leading cause of bankruptcy in this country and unfortunately these bills are not exempt from debt collecting agencies. Wage garnishment is an option for debt collections in some cases, but can the Federal Government do it to recover medical expenses?
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Definition
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According to Princeton University, garnishment is "a court order to an employer to withhold all or part of an employee's wages and to send the money to the court, or to the person who won a lawsuit against the employee."
Protection
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The Federal Trade Commission monitors and regulates the Fair Debt Collection Practices Act that is written to protect consumers from unfair, deceptive, or abusive behaviors by a debt collector such as an agency or an attorney.
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Types
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The FDCPA is applied to all debts that are personal, or household expenses such as credit card debt, medical bills, mortgages and auto loans. If you have accumulated debt to start or run a business the FDCPA is not applicable.
Exemptions
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Bank funds, alimony, child support, federal and state income tax refunds and wages from employment are available for garnishment. However, several federal benefits such as Social Security Disability, Veteran's benefits, Supplemental Security Income (SSI), Service Members' salary, student assistance and many others.
Federal garnishment
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In certain circumstances, the Federal Government will garnish wages to recoup debts owed. But, this is true only if the money owed is owed to government, such as a federal student loan. Credit card and medical bills are not debts that are owed to the Federal Government, and would not fall into this category.
State garnishment
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Even though Federal courts cannot garnish your wages for this debt, state courts can garnish wages for outstanding medical bills. The amount to be garnished and the duration will vary by state.
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