A key state Senate committee passed legislation to fix a state garnishment system that a judge last year said was broken.
Senate Bill 255, passed on Tuesday, would require creditors to inform debtors that money originating from Social Security benefits, welfare and workers' compensation is off limits. The bill would also provide more notice about how people can reclaim money that is taken improperly, as well as to speed up the process.
"It's just a good bill for businesses and consumers," said Sen. Jesse Stone, R-Waynesboro, who pre-filed the bill. "The sooner we get it in the law, the sooner everybody will be back in the business of collections."
Stone said he hoped the bill would move quickly through the Senate and would pass the House. Once it is signed, under the amended proposal, it would become law after 30 days.
“This law would essentially make garnishments on financial institutions useless,” said attorney James Carroll. He said the 24-hour window the bill proposes is not long enough to capture the funds in a bank account.
At a committee hearing last week, attorney Bryan Kaplan said the proposed amendments would allow people to tell the court about other debts that may take precedence over the garnishment at hand. He said this would allow debtors to circumvent the typical bankruptcy process.
Stone said he did not want to lengthen the period to create any additional delays in the process. As far as the bankruptcy concerns, he said, “one lien doesn’t jump in front of another.”
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