'I have no money': debt collection continues despite pandemic
Veronica Cavalli was at home in New York City last week, laid off from her job amid the Covid-19 pandemic and, as instructed by New York’s governor, trying to minimize her contact with others to halt the spread of the virus.
When supplies ran low she sent her teenage children to the grocery store only to discover her debit card wasn’t working. She checked her account. It was thousands of dollars overdrawn.
Cavalli suspected fraud and after spending hours on the phone with her bank trying to find out what happened, she was informed a court judgment had been made against her by a creditor to garnish her wages directly from her bank account for credit card debt she accrued a few years ago while her husband, who is now disabled, was experiencing a debilitating illness.
“I didn’t know anything about the wage garnishment until it was posted on my account,” said Cavalli. “I have zero funds. I have no money. I’m at the breaking point.”
One out of every six Americans has an unpaid medical bill on their credit report, amounting to $81bn in debt nationwide. Every year, about 530,000 Americans who file bankruptcy cite medical debt as a contributing factor.
In the wake of the coronavirus pandemic, several legal groups across the US are calling on federal and state governments to halt private and public debt collection, including wage garnishment, and preventing any federal stimulus checks to Americans from being garnished by debt collectors. For now the debt collection continues unabated.
Cavalli, the sole income earner of her household, has been trying to file for unemployment benefits, but as she has previously claimed them in the past 18 months, the online system won’t accept her application. She has not been able to get in touch with someone at the state unemployment office due to the recent flood of applications.
Because the courts in New York City have closed except for essential matters, Cavalli and her attorneys have yet to gain full access to the court files on the wage garnishment order. The vast majority of consumer debtors have no legal representation and often are not given notice they face a lawsuit.