A bill has been introduced in the Maryland state legislature that would increase the amount of money that individuals would be able to protect when their wages or assets are garnished as a result of debt collection lawsuit.
A copy of the proposed legislation, which was introduced by Rep. Lorig Charkoudian and Rep. Kathleen Dumais can be accessed by clicking here.
Under the bill, judgment creditors would be able to seize 25% of the individual’s disposable wages or 50 times the state minimum wage in effect at the time the wages are due, multiplied by the number of weeks during which the wages due were earned. Currently, the amount that can be exempt is 30 times the federal minimum wage.
The minimum wage in Maryland is currently $10.10 per hour. The federal minimum wage is $7.25 per hour. Under the proposed legislation, $505 would be exempt from any judgment, up from $217.50 currently.
Property insurance payments would also now be exempt from garnishments under the proposed legislation.
States have been working hard at expanding the amount of money that individuals would be able to protect from being garnished in the event a creditor obtains a judgment against an individual for an unpaid debt. A new law is set to go into effect in California later this year, for example, which will allow individuals to keep $1,724 in their bank accounts when a judgment has been entered against them.
The National Consumer Law Center has also proposed model legislation that can be used by states to restrict how much can be recovered when a judgment has been entered against an individual.
