Sunday, July 12, 2009

Another Case For Less Interference ...

Be Glad You Live In SC, Or You Might Get a Surprise In Your Check .....

For those of you who read this blog a lot, you know that we prefer to let citizens work things out for themselves, particularly with repsect to financial matters. There may be some exceptions where municipalities can take steps to help, like with the recent City of Florence ISO ratings affecting insurance rates. But for the most part, if you give citizens the chance to do the right thing, they will. Well, we have some signs of solid proof that this is true, with respect to Wage Garnishment.

If you're not very familiar with wage garnishment here in South Carolina, it isn't surprising - it's illegal here, with the exceptions of child support and unpaid taxes. North Carolina is the same, as well as Pennsylvania and Texas. Most other states allow companies to take your money out of your check before you even see it - which in the end, according to statistics from the Associated Press, actually does them as disservice. How? In states where there is no wage garnishment, bankruptcies are significantly lower than in where wage garnishment exists - way, way lower....

Let's compare apples to apples.... In South Carolina, bankruptcies are ONE FOURTH the rate as Georgia's ...North Carolina's is one third's of Tennessee's, and Pennsylvania and Florida's are half of Ohio and Alabama's. Texas' is also lower, but not as significantly, which once again proves that Texas can screw anything up... Overall, the nationwide rate is 42 percent higher than the rates in those five states. Clearly, there is solid data to support that wage garnishment has an adverse effect not only on citizens, but on those garnishing the wages in the first place. What would appear to be good for the businesses is actually a poison pill.

Why is that? We'd like to think that the main reason is because people can generally handle their finances better than just having it forced upon them. There is a lot of human nature in this too. Let me pay you when I can , and I'll keep doing it. Yank it out of my check without my consent, and I'm going to resent it, and probably decide to tell you to screw off, and just go to bankruptcy. The fact is most people want to pay off their debts, but when companies start tacking on late charges and garnishing - read: gettign greedy - then the consumer hits back. Granted, they hurt themselves by filing, but at least they're debts are cleared.

Hopefully, this data will reach groups that do garnish wages, and they'll think twice about doing it. But I doubt it... Businesses are generally too concerned about today, but the facts are that if they went a little easier on consumers, they would do better in the long term - and these numbers prove it...

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4 comments:

Anonymous said...

Mike-there is a mirad of reason why SC does not have a garnishment allowance.But most banks instead will file a summons and complaint seeking a judgment.Once the bank gets its judgment(and they will in better than 98%)of the time fit can either:1)file the judgment and sit on it for 10years and let it sit; or 2)refer the judgment to the sheriff or an attorney for execution. Either way it is additional costs to taxpayers in court costs/time not to mention time with the clerk of court and sheriff if execution remedy/relief is sought.
Garnishment may be costly to the indivual debtor but the"other"side of the coin is the rest of us pay with our tax dollars.
And in the end the consumer will still file bankruptcy. Speaking of bankruptcy,in SC most bankruptcy attornys will require their fees be paid up front before filing,so if you cant pay your debt how are you going to pay for an attorney??
The end game is that if you cant afford to pay cash dont get it on credit unless you absolutely must, the potential downside can be ruinous...teg

mg said...

you lost me at Mike

Mike Reino said...

Aw, he's just trying to dazzle you with big words like 'myriad'...Don't let Tommy fool you!!!

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