Many Americans, amidst the coronavirus pandemic, were shocked to find out how much life would change—and quickly so. Millions were diagnosed with the virus, and thousands died—leaving behind family and friends to mourn their memory. Schools closed, businesses closed, and suddenly a large percentage of workers were displaced, watching their careers disappear or be placed on hold. Household budgets suffered enormously, and although stimulus checks were dispersed and appreciated, for a lot of people that just represented a drop in the bucket for helping with expenses.
Student loan borrowers also received a respite thanks to the CARES Act, for some types of federal loans, but not all. Many different types of private loan servicers helped also with deferments, and are still doing so—including in states like California. Creditors and debt collectors were quieted for months, too. Unfortunately for many though, repercussions from previous legal actions like collections lawsuits were still in effect. If you had a default judgment granted against you, the creditor probably walked away with the almost immediate power to garnish your wages, freeze checking accounts, and seize and sell of your property. Garnishing of wages particularly has continued throughout the pandemic, leading many to experience further, crushing financial distress.
Recent news discusses the potential for a new wave of default judgments to be granted too:
“There’s going to be a whole swath of people who never thought they’d be in a position to default,” said Pamela Foohey, a law professor at Indiana University “It’s not productive to be garnishing people’s wages when they need to pay for food and get back on track financially,” she said.
With almost half of the households in the US reeling from the effects of unemployment or loss of hours at work, creditors may soon be hard-pressed to find wages to garnish. If you have been served with a collections lawsuit though, be aware that if a default judgment is granted, it could be good for up to 20 years.
Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at info@debtorprotectors.com.