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Updated garnishment and bankruptcy exemptions are needed to ensure the newly increased state EITC goes to vulnerable families, not out-of-state debt collectors<\/span><\/span>\u00a0<\/span><\/em><\/p>\n<\/div>\n <\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n LANSING, Mich. (June 23, 2023) \u2013<\/span><\/span>\u00a0<\/span><\/span>Sen<\/span>.<\/span><\/span>\u00a0Jeff Irwin<\/span><\/span><\/strong>\u00a0(D-Ann Arbor) and\u00a0<\/strong><\/span><\/span>Sen<\/span>.<\/span><\/span><\/strong>\u00a0Mary Cavanagh<\/strong>\u00a0<\/span><\/span><\/span>(<\/span><\/span>D-Redford Twp<\/span>.)<\/span><\/span>\u00a0<\/span><\/span>introduced bills Thursday to better protect families\u2019 housing, transportati<\/span>on, and other basic needs when they are struggling to pay their debts. Current garnishment law and bankruptcy exemptions allow debt collectors to drain bank accounts to zero, with no protections in place to prevent seizure of state public benefits or the r<\/span>ecently increased state Earned Income Tax Credit (EITC).\u00a0<\/span><\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n <\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n Senate\u00a0<\/span><\/span>Bil<\/span>l 408<\/span>\u00a0woul<\/span>d\u00a0<\/span><\/span>provide f<\/span>or<\/span>\u00a0clearer notice when a person is sued over a debt and would\u00a0<\/span><\/span><\/span>update consumer debt garnishment exemption categories and amounts<\/span><\/span><\/a>. Senate\u00a0<\/span><\/span>Bil<\/span>l 409<\/span>\u00a0would\u00a0<\/span><\/span><\/span>update Michigan bankr<\/span>u<\/span>ptcy exemption categories and amounts<\/span><\/span><\/a>.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n <\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n \u201cMost people want to pay their debts, but excessive debt collection gets in the way of that by seizing the assets they need to live and work,\u201d Sen.\u00a0<\/strong><\/span><\/span>Irwin<\/span><\/span><\/strong>\u00a0said. \u201cMichigan just expanded the EITC because we recognize tha<\/span>t vulnerable families need that support, but we need to change our garnishment law to ensure those public dollars go where\u00a0<\/span><\/span>they\u2019re<\/span>\u00a0intended instead of being funneled straight into the pockets of private debt collectors. Third-party debt collectors have bee<\/span>n using our publicly funded Treasury Department and courts as their accounts receivable department, with very few legal protections to give them an incentive to work out payment plans instead.\u201d<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n <\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n \u201cMichigan families who are overwhelmed by debt need a chance\u00a0<\/span><\/span>at a fresh start,\u201d Sen.\u00a0<\/em><\/strong><\/span><\/span>Cavanagh<\/span><\/span><\/em><\/strong>\u00a0said. \u201cSometimes bankruptcy is the only\u00a0<\/span><\/span>option<\/span>\u00a0when people hit\u00a0<\/span><\/span>hard times<\/span>. But the Michigan bankruptcy exemptions are so low that deserving families often\u00a0<\/span><\/span>have to<\/span>\u00a0make the impossible choice between endless garnishment or fi<\/span>ling bankruptcy and losing their homes and cars. In today\u2019s world, a fresh start without a home or car is not a fresh start.\u201d<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n