Every year, more than 130,000 Michigan residents have their paychecks or their assets garnished by a debt collector. Michigan's current garnishment protections are the weakest in the country, and those weak protections make paying back debts extremely destabilizing for family finances. Today, a person facing a debt can have their bank account wiped to zero, or have their car seized to pay off a debt as low as $1,000.
To tackle this problem, a bill (S.B. 408) is under consideration in the Michigan Legislature that will update Michigan's protections for the first time since 1964. As currently amended, the bill will protect:
- $800 in a person's bank account;
- $15,000 value of a person's car;
- $125,000 value of a home; and
- $413.20 of weekly wages.
S.B. 408 does not forgive debt--it increases protections so that Michiganders can better manage paying back debts they owe without being thrust into poverty. It will also ensure that the state Earned Income Tax Credit is protected from garnishment this upcoming tax year--in 2024, an estimated 78,000 working families' EITCs were automatically redirected to debt collectors, most of which are based out-of-state.
Tell your legislators to support S.B. 408 to help ensure financial stability for all Michiganders!Dear [Decisionmaker],
I'm writing to urge you to support S.B. 408 — The Garnishment Protection Act – which offers Michiganders a reasonable pathway to pay off their debts without debilitating disruptions to their daily lives.
Each year, more than 130,000 Michiganders have their paychecks, assets, and state tax returns garnished by a private debt collector as the result of a debt collection lawsuit. Michigan's garnishment protections are the weakest in the country, having not been meaningfully updated since 1964. Currently, Michiganders can have 25% of their paychecks garnished or the entirety of the money in their bank accounts or state tax returns seized to satisfy a debt.
S.B. 408 does not forgive debt. The bill increases Michigan's outdated protections to account for modern day cost-of-living and inflation. It also makes the state Earned Income Tax Credit exempt from garnishment, ensuring the taxpayer benefit is not automatically redirected to private, out-of-state debt collection companies. This brings protections more in line with those in other states and allows working families to pay back the debt they owe without having to worry about keeping the lights on or food on the table.
I urge you to support S.B. 408 to help ensure financial stability for more Michiganders! Thank you.
Sincerely,
[Your Name]
