Bankruptcy Blog

Outdated Debt Collection Exemption Laws: Preventing Fresh Starts Nationwide

by on 11/15/2013

If you gain a debt, you should work to pay it off. Seems like a rather simple process, doesn’t it? Well, according to the National Consumer Law Center (NCLC), the nation’s economic downturn and outdated state-level exemption laws are preventing growing numbers of hardworking debtors from holding up their end of the bargain.

This is not merely conjecture either. The NCLC, an organization devoted to the “advocacy, training, publications, and public policy work on fair debt collection to promote family financial well-being”, came to this conclusion after surveying the current exemption laws of every U.S. state. What they found was unsettling: not one jurisdiction’s laws meet basic standards so that debtors can continue to work productively to support themselves and their families. Not one.

Put simply, current collection exemption laws are doing the public such a disservice that they are driving financially-strained families into poverty. Instead of assisting those who have been hit hardest by these trying economic times, these exemption laws are worsening their already difficult situations.

Shouldn’t exemption laws take into account present-day circumstances? Shouldn’t exemption laws reflect even an ounce of common sense? Shouldn’t exemption laws work for the people, not against them? We, along with the NCLC, certainly believe so.

Exemption Law Reform

The NCLC’s report outlined several seemingly obvious revisions to debt collection exemption laws that would positively affect indebted families. Their most significant recommendations have been categorized and described below:

Exemptions To Maintain Employment: In order to allow for one to continue working toward paying off debts, protecting a working vehicle, tools/equipment, and money to cover commuting and daily work expenses is critical.
Exemptions To Preserve Families: By protecting housing, reasonable necessities, daily transportation, and living wages (for rent, utilities, basic needs), families will be much less likely to become fractured and/or slip into poverty.
Exemptions To Prevent Destitution: While all previously recommended revisions could fall in this bucket, the intent here is to close lender loopholes, protect retirement funds, and adjust debts for inflation.

For more information on the shortcomings of debt collection exemption laws, read the NCLC’s full No Fresh Start report.

Avoid Further Hardship

If you are currently struggling to pay off debts or are being harassed by creditors or collection agencies, take control of your financial future. Contact Bankruptcy Law Group today to find the debt relief option that’s right for you and your family.