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Millions of Americans are still grappling with debt they've accumulated since the recession hit. And new numbers out Monday show many are having a tougher time than you might think.

One in 10 working Americans between the ages of 35 and 44 are getting their wages garnished. That means their pay is being docked — often over an old credit card debt, medical bill or student loan.

That striking figure comes out of a collaboration between NPR and ProPublica. The reporting offers the first available national numbers on wage garnishment.

A 'Roundhouse' Punch

Back in 2009, Kevin Evans was one of millions of Americans blindsided by the recession. He had a 25-year career selling office furniture, but suddenly, companies stopped buying furniture. His income collapsed. He sold his three-bedroom home outside Kansas City that he could no longer afford.

This story was co-reported by NPR and ProPublica, an investigative journalism organization.

In conjunction with these stories, ADP, the nation's largest payroll services provider, has released a report on wage garnishment. It studied 2013 payroll records for 13 million employees at the request of ProPublica. Read the report here.

For more on this story:

From NPR: With Debt Collection, Your Bank Account Could Be At Risk

From ProPublica: Unseen Toll, Wages Of Millions Seized To Pay Past Debts

From ProPublica: Old Debts, Fresh Pain: Weak Laws Offer Debtors Little Protection

If you have first-hand experience being sued over a debt, NPR and ProPublica would love to hear from you. Use this form to send a tip confidentially. A reporter may follow up with you.

For the next several years he worked a string of low-wage jobs: at a lumber yard, at a 24-hour fitness center. He rented a room from a friend. He never collected unemployment. But with a daughter in college and basic living expenses, he ended up with a $7,000 credit card debt that he says he couldn't pay. Evans, 58, had fallen from middle-class life into basic subsistence living.

Then late last year, he found a better-paying, full-time customer service job in Springfield, Mo. Things were finally getting better, until early this year, when he opened his paycheck and found a quarter of it missing. His credit card lender, Capital One, had garnished his wages.

Twice a month, whether he could afford it or not, 25 percent of his pay — the legal limit — would go to his debt, which had ballooned with interest and fees to more than $15,000. "It was a roundhouse from the right that just knocks you down and out," Evans says.

The recession and its aftermath have fueled an explosion of cases like Evans'. Creditors and collectors have pursued struggling cardholders and other debtors in court, securing judgments that allow them to seize a chunk of even meager earnings. The financial blow can be devastating — more than half of U.S. states allow creditors to take a quarter of after-tax wages. But despite the rise in garnishments, the number of Americans affected has remained unknown.

At the request of ProPublica, ADP, the nation's largest payroll services provider, undertook a study of payroll records for 13 million employees. ADP's report, released Monday, shows that among employees in the prime working ages of 35 to 44 who had their wages garnished in 2013, roughly half, unsurprisingly, owed child support. But a sizable number had their earnings docked for consumer debts, such as credit cards, medical bills and student loans.

Your Money

With Debt Collection, Your Bank Account Could Be At Risk

Actually, for workers earning $25,000 to $40,000 a year, more people were garnished for consumer debt than for child support. This marks a dramatic change. In the past, the vast majority of wage garnishments went to secure child support payments or to collect on unpaid taxes. In recent years, though, debt collectors have been filing millions of lawsuits against people for just basic consumer debt: medical bills, student loans and credit card debt.

Extended to the entire population of U.S. employees, ADP's findings indicate that 4 million workers — about 3 percent of all employees — had wages taken for a consumer debt in 2013. People in some geographic regions and income groups had twice that rate of garnishment.

Carolyn Carter of the National Consumer Law Center says these findings are "alarming."

"States and the federal government should look on reforming our wage garnishment laws with some urgency," she says.

The increase in consumer debt seizures is "a big change," largely invisible to researchers because of the lack of data, says Michael Collins, faculty director of the Center for Financial Security at the University of Wisconsin, Madison. The potential financial hardship imposed by these seizures and their sheer number should grab the attention of policymakers, he says. "It is something we should care about."

High Garnishment Rates In The Midwest

ADP's study, the first large-scale look at how many employees are having their wages garnished and why, reveals what has been a hidden burden for working-class families. Wage seizures were most common among middle-aged, blue-collar workers and lower-income employees.

Nearly 5 percent of those earning between $25,000 and $40,000 per year had a portion of their wages diverted to pay down consumer debts alone in 2013, ADP found. More people in that income group were garnished to pay off consumer debt than to pay child support.

Perhaps due to the struggling economy in the region, the rate was highest in the Midwest. There, more than 6 percent of employees earning between $25,000 and $40,000 — 1 in 16 — had wages seized over consumer debt. Employees in the Northeast had the lowest rate. The statistics were not broken down by race.

Currently, debtors' fates depend significantly on where they happen to live. State laws vary widely. Four states — Texas, Pennsylvania, North Carolina and South Carolina — largely prohibit wage garnishment stemming from consumer debt.

Most states, however, allow creditors to seize a quarter of a debtor's wages — the highest rate permitted under federal law. Evans had the misfortune to live in Missouri, which not only allows creditors to seize 25 percent, but also allows them to continue to charge a high interest rate even after a judgment.

A Note About Garnishment In Missouri

Missouri provides a protection for a head of household with dependent children which caps the garnishment rate at 10 percent of a worker's paycheck. But Kevin Evans didn't qualify for that — or even know about it. And the burden is on the debtor to know about such exemptions and ask for a lower garnishment rate. It is legal for debt collectors to seize 25 percent of people's paychecks in Missouri even if they are head of household until the debtor objects and asks for the exemption.

By early 2010, Evans had fallen so far behind that Capital One suspended his card. For months, he made monthly $200 payments toward his $7,000 debt, according to statements reviewed by NPR and ProPublica. But by this time, the payments barely kept pace with the interest piling on at 26 percent. In 2011, when Evans could no longer keep up, Capital One filed suit. Court records show that Evans was served a summons, but he says he didn't understand that the stack of paperwork he received included a summons with a hearing date to appear in court.

If Evans had lived in neighboring Illinois, the interest rate on his debt would have dropped to below 10 percent after his creditor had won a judgment in court. But in Missouri, creditors can continue to add the contractual rate of interest for the life of the debt, so Evans' bill kept mounting. Missouri law also allowed Capital One to tack on a $1,200 attorney fee. Some other states cap such fees to no more than a few hundred dollars.

Evans has involuntarily paid over $6,000 this year on his old debt, an average of about $480 each paycheck, but he still owes more than $10,000. "It's my debt. I want to pay it," Evans says. But "I need to come up with large quantities of money so I don't just keep getting pummeled."

Capital One says in a statement that legal action is always a last resort. The company says it tried to work with Evans but that he was unable to keep up with the payments on a payment plan that he had agreed to.

The Garnishment Process

Companies can also seize funds from a borrower's bank account. There is no data on how frequently this happens, even though it is a common recourse for collectors. Among the people interviewed by NPR and ProPublica who were having their wages garnished, more often than not, debt collectors had also made attempts to seize money from their bank accounts. Some people we interviewed say they had stopped keeping money in banks as a result.

Guilty And Charged

As Court Fees Rise, The Poor Are Paying The Price

The garnishment process for most debts begins in local courts. A company can file suit as soon as a few months after a debtor falls behind. A ProPublica review of court records in eight states shows the bulk of lawsuits are filed by just a few types of creditors and companies. Besides major credit card lenders such as Capital One, medical debt is a major source of such suits. High-cost lenders who deal in payday and installment loans also file suits by the thousands. And finally, an outsized portion comes from debt buyers — companies that purchase mostly unpaid credit card bills.

When these creditors and collectors go to court, they are almost always represented by an attorney. Defendants — usually in tough financial straits or unfamiliar with the court system — almost never are.

In Clay County, Mo., where Capital One brought its suit against Evans in 2011, only 7 percent of defendants in debt collection cases have their own attorneys, according to ProPublica's review of state court data. Often the debtors don't show up to court at all: The most common outcome of a debt collection lawsuit in Missouri (and any other state) is a judgment by default.

Millions of debt collection lawsuits are filed every year in local courts. In 2011, for instance, the year Capital One went to court against Evans, more than 100,000 such suits were filed in Missouri alone.

Despite these numbers, creditors and debt collectors say they only pursue lawsuits and garnishments against consumers after other collection attempts fail. "Litigation is a very high-cost mechanism for trying to collect a debt," says Rob Foehl, general counsel at the Association of Credit and Collection Professionals. "It's really only a small percentage of outstanding debts that go through the process."

Experts in garnishment say they've seen a clear shift in the type of debts that are pursued. A decade ago, child support accounted for the overwhelming majority of pay seizures, said Amy Bryant, a consultant who advises employers on payroll issues and has written a book on garnishment laws.

"The emphasis is now on creditor garnishments," she says.

Bryant also says the rise in garnishments has become an unanticipated burden for employers.

"It becomes very complicated," she says, particularly for national employers who must navigate the differences in state laws. "It's very easy to make a mistake in the process." If an employer does not correctly handle a garnishment order, she says, it can become liable for a portion or even the entirety of the debt in some states.

The burden was enough to prompt the American Payroll Association to request in 2011 that the Uniform Law Commission draft a model state law on wage garnishment. Bryant said employers are hoping that the new law, which is still being drafted, will be adopted by a large number of states and reduce complications.

What's it like for a family trying to live on wages reduced by old debts? On Tuesday, NPR and ProPublica will examine how much creditors and debt collectors are allowed to take from debtors' wages and bank accounts, and how it impacts their lives.

If you have first-hand experience being sued over a debt, NPR and ProPublica would love to hear from you. Use this form to send a tip confidentially. A reporter may follow up with you.

consumer debt

garnishment

Doctors and hospitals treated more patients and collected more payments in the spring as millions gained insurance coverage under the health law, new figures from the government show.

But analysts called the second-quarter increases modest and said there is little evidence to suggest that wider coverage and a recovering economy are pushing health spending growth to the painful levels of a decade ago.

Thursday's results from the Census Bureau's survey of service industries join other recent cost indicators that "are quite a bit lower than what the folks at CMS were projecting," said Charles Roehrig, director of the Center for Sustainable Health Spending at the Altarum Institute, a nonprofit research and consulting outfit. "And they're lower than what we were expecting as well."

CMS is the Centers for Medicare & Medicaid Services, the government's main health care bookkeeper. Last week CMS projected that health-expenditure growth would accelerate to 5.6 percent this year from an estimated 3.6 percent in 2013.

But health and social spending as measured by the Census Bureau grew by only 3.7 percent from the second quarter of 2013 to the same quarter of 2014. Hospital revenue increased 4.9 percent during the same period. Revenue for physician offices barely budged, growing by only 0.6 percent. Medical lab revenue rose 1.9 percent.

The report is far from being the last word. It doesn't include spending on prescription drugs, which has been rising this year thanks to new very expensive medicines for hepatitis C.

And while the Census Bureau's year-over-year results for the second quarter show tame cost trends, the increase from the first quarter to the second was more substantial. Total health and social spending rose at an annual rate of more than 12 percent from first quarter to the next. If sustained, such acceleration would raise alarms and actuaries' blood pressure.

But some who follow costs closely don't think the pace will continue.

First, health spending suffered a mini-crash over the winter, as bad storms kept people away from caregivers. Hospitals and doctors billed less from January to March than they did last fall. Part of the second-quarter recovery may just have been catch-up, analysts said.

At the same time, many people covered through the health law's online marketplaces didn't sign up until close to the deadline at the end of March. Much of the spring increase may represent a one-time surge as those folks sought treatment for previously neglected conditions.

For those reasons, the year-over-year results for the second quarter may give a better indication of longer-term cost trends than the change from the first quarter to the second, Roehrig said.

Estimates vary, but no one disputes the idea that the Affordable Care Act's health insurance marketplaces and expansion of Medicaid for the poor have added millions of previously uninsured people to coverage rosters this year.

History and logic suggest that expanded coverage and an improving economy will boost long-term, national health expenditures from their average growth rate of 3.7 percent during the past five years. (That's spending by everybody — government programs, employer insurance, commercial plans and consumers paying out of pocket.)

But so far the speedup seems nowhere close to the near-double-digit rates in the early 2000s.

health costs

Doctors and hospitals treated more patients and collected more payments in the spring as millions gained insurance coverage under the health law, new figures from the government show.

But analysts called the second-quarter increases modest and said there is little evidence to suggest that wider coverage and a recovering economy are pushing health spending growth to the painful levels of a decade ago.

Thursday's results from the Census Bureau's survey of service industries join other recent cost indicators that "are quite a bit lower than what the folks at CMS were projecting," said Charles Roehrig, director of the Center for Sustainable Health Spending at the Altarum Institute, a nonprofit research and consulting outfit. "And they're lower than what we were expecting as well."

CMS is the Centers for Medicare & Medicaid Services, the government's main health care bookkeeper. Last week CMS projected that health-expenditure growth would accelerate to 5.6 percent this year from an estimated 3.6 percent in 2013.

But health and social spending as measured by the Census Bureau grew by only 3.7 percent from the second quarter of 2013 to the same quarter of 2014. Hospital revenue increased 4.9 percent during the same period. Revenue for physician offices barely budged, growing by only 0.6 percent. Medical lab revenue rose 1.9 percent.

The report is far from being the last word. It doesn't include spending on prescription drugs, which has been rising this year thanks to new very expensive medicines for hepatitis C.

And while the Census Bureau's year-over-year results for the second quarter show tame cost trends, the increase from the first quarter to the second was more substantial. Total health and social spending rose at an annual rate of more than 12 percent from first quarter to the next. If sustained, such acceleration would raise alarms and actuaries' blood pressure.

But some who follow costs closely don't think the pace will continue.

First, health spending suffered a mini-crash over the winter, as bad storms kept people away from caregivers. Hospitals and doctors billed less from January to March than they did last fall. Part of the second-quarter recovery may just have been catch-up, analysts said.

At the same time, many people covered through the health law's online marketplaces didn't sign up until close to the deadline at the end of March. Much of the spring increase may represent a one-time surge as those folks sought treatment for previously neglected conditions.

For those reasons, the year-over-year results for the second quarter may give a better indication of longer-term cost trends than the change from the first quarter to the second, Roehrig said.

Estimates vary, but no one disputes the idea that the Affordable Care Act's health insurance marketplaces and expansion of Medicaid for the poor have added millions of previously uninsured people to coverage rosters this year.

History and logic suggest that expanded coverage and an improving economy will boost long-term, national health expenditures from their average growth rate of 3.7 percent during the past five years. (That's spending by everybody — government programs, employer insurance, commercial plans and consumers paying out of pocket.)

But so far the speedup seems nowhere close to the near-double-digit rates in the early 2000s.

health costs

Millions of Americans are still grappling with debt they've accumulated since the recession hit. And new numbers out Monday show many are having a tougher time than you might think.

One in 10 working Americans between the ages of 35 and 44 are getting their wages garnished. That means their pay is being docked — often over an old credit card debt, medical bill or student loan.

That striking figure comes out of a collaboration between NPR and ProPublica. The reporting offers the first available national numbers on wage garnishment.

A 'Roundhouse' Punch

Back in 2009, Kevin Evans was one of millions of Americans blindsided by the recession. He had a 25-year career selling office furniture, but suddenly, companies stopped buying furniture. His income collapsed. He sold his three-bedroom home outside Kansas City that he could no longer afford.

This story was co-reported by NPR and ProPublica, an investigative journalism organization.

In conjunction with these stories, ADP, the nation's largest payroll services provider, has released a report on wage garnishment. It studied 2013 payroll records for 13 million employees at the request of ProPublica. Read the report here.

For more on this story:

From NPR: With Debt Collection, Your Bank Account Could Be At Risk

From ProPublica: Unseen Toll, Wages Of Millions Seized To Pay Past Debts

From ProPublica: Old Debts, Fresh Pain: Weak Laws Offer Debtors Little Protection

If you have first-hand experience being sued over a debt, NPR and ProPublica would love to hear from you. Use this form to send a tip confidentially. A reporter may follow up with you.

For the next several years he worked a string of low-wage jobs: at a lumber yard, at a 24-hour fitness center. He rented a room from a friend. He never collected unemployment. But with a daughter in college and basic living expenses, he ended up with a $7,000 credit card debt that he says he couldn't pay. Evans, 58, had fallen from middle-class life into basic subsistence living.

Then late last year, he found a better-paying, full-time customer service job in Springfield, Mo. Things were finally getting better, until early this year, when he opened his paycheck and found a quarter of it missing. His credit card lender, Capital One, had garnished his wages.

Twice a month, whether he could afford it or not, 25 percent of his pay — the legal limit — would go to his debt, which had ballooned with interest and fees to more than $15,000. "It was a roundhouse from the right that just knocks you down and out," Evans says.

The recession and its aftermath have fueled an explosion of cases like Evans'. Creditors and collectors have pursued struggling cardholders and other debtors in court, securing judgments that allow them to seize a chunk of even meager earnings. The financial blow can be devastating — more than half of U.S. states allow creditors to take a quarter of after-tax wages. But despite the rise in garnishments, the number of Americans affected has remained unknown.

At the request of ProPublica, ADP, the nation's largest payroll services provider, undertook a study of payroll records for 13 million employees. ADP's report, released Monday, shows that among employees in the prime working ages of 35 to 44 who had their wages garnished in 2013, roughly half, unsurprisingly, owed child support. But a sizable number had their earnings docked for consumer debts, such as credit cards, medical bills and student loans.

Your Money

With Debt Collection, Your Bank Account Could Be At Risk

Actually, for workers earning $25,000 to $40,000 a year, more people were garnished for consumer debt than for child support. This marks a dramatic change. In the past, the vast majority of wage garnishments went to secure child support payments or to collect on unpaid taxes. In recent years, though, debt collectors have been filing millions of lawsuits against people for just basic consumer debt: medical bills, student loans and credit card debt.

Extended to the entire population of U.S. employees, ADP's findings indicate that 4 million workers — about 3 percent of all employees — had wages taken for a consumer debt in 2013. People in some geographic regions and income groups had twice that rate of garnishment.

Carolyn Carter of the National Consumer Law Center says these findings are "alarming."

"States and the federal government should look on reforming our wage garnishment laws with some urgency," she says.

The increase in consumer debt seizures is "a big change," largely invisible to researchers because of the lack of data, says Michael Collins, faculty director of the Center for Financial Security at the University of Wisconsin, Madison. The potential financial hardship imposed by these seizures and their sheer number should grab the attention of policymakers, he says. "It is something we should care about."

High Garnishment Rates In The Midwest

ADP's study, the first large-scale look at how many employees are having their wages garnished and why, reveals what has been a hidden burden for working-class families. Wage seizures were most common among middle-aged, blue-collar workers and lower-income employees.

Nearly 5 percent of those earning between $25,000 and $40,000 per year had a portion of their wages diverted to pay down consumer debts alone in 2013, ADP found. More people in that income group were garnished to pay off consumer debt than to pay child support.

Perhaps due to the struggling economy in the region, the rate was highest in the Midwest. There, more than 6 percent of employees earning between $25,000 and $40,000 — 1 in 16 — had wages seized over consumer debt. Employees in the Northeast had the lowest rate. The statistics were not broken down by race.

Currently, debtors' fates depend significantly on where they happen to live. State laws vary widely. Four states — Texas, Pennsylvania, North Carolina and South Carolina — largely prohibit wage garnishment stemming from consumer debt.

Most states, however, allow creditors to seize a quarter of a debtor's wages — the highest rate permitted under federal law. Evans had the misfortune to live in Missouri, which not only allows creditors to seize 25 percent, but also allows them to continue to charge a high interest rate even after a judgment.

A Note About Garnishment In Missouri

Missouri provides a protection for a head of household with dependent children which caps the garnishment rate at 10 percent of a worker's paycheck. But Kevin Evans didn't qualify for that — or even know about it. And the burden is on the debtor to know about such exemptions and ask for a lower garnishment rate. It is legal for debt collectors to seize 25 percent of people's paychecks in Missouri even if they are head of household until the debtor objects and asks for the exemption.

By early 2010, Evans had fallen so far behind that Capital One suspended his card. For months, he made monthly $200 payments toward his $7,000 debt, according to statements reviewed by NPR and ProPublica. But by this time, the payments barely kept pace with the interest piling on at 26 percent. In 2011, when Evans could no longer keep up, Capital One filed suit. Court records show that Evans was served a summons, but he says he didn't understand that the stack of paperwork he received included a summons with a hearing date to appear in court.

If Evans had lived in neighboring Illinois, the interest rate on his debt would have dropped to below 10 percent after his creditor had won a judgment in court. But in Missouri, creditors can continue to add the contractual rate of interest for the life of the debt, so Evans' bill kept mounting. Missouri law also allowed Capital One to tack on a $1,200 attorney fee. Some other states cap such fees to no more than a few hundred dollars.

Evans has involuntarily paid over $6,000 this year on his old debt, an average of about $480 each paycheck, but he still owes more than $10,000. "It's my debt. I want to pay it," Evans says. But "I need to come up with large quantities of money so I don't just keep getting pummeled."

Capital One says in a statement that legal action is always a last resort. The company says it tried to work with Evans but that he was unable to keep up with the payments on a payment plan that he had agreed to.

The Garnishment Process

Companies can also seize funds from a borrower's bank account. There is no data on how frequently this happens, even though it is a common recourse for collectors. Among the people interviewed by NPR and ProPublica who were having their wages garnished, more often than not, debt collectors had also made attempts to seize money from their bank accounts. Some people we interviewed say they had stopped keeping money in banks as a result.

Guilty And Charged

As Court Fees Rise, The Poor Are Paying The Price

The garnishment process for most debts begins in local courts. A company can file suit as soon as a few months after a debtor falls behind. A ProPublica review of court records in eight states shows the bulk of lawsuits are filed by just a few types of creditors and companies. Besides major credit card lenders such as Capital One, medical debt is a major source of such suits. High-cost lenders who deal in payday and installment loans also file suits by the thousands. And finally, an outsized portion comes from debt buyers — companies that purchase mostly unpaid credit card bills.

When these creditors and collectors go to court, they are almost always represented by an attorney. Defendants — usually in tough financial straits or unfamiliar with the court system — almost never are.

In Clay County, Mo., where Capital One brought its suit against Evans in 2011, only 7 percent of defendants in debt collection cases have their own attorneys, according to ProPublica's review of state court data. Often the debtors don't show up to court at all: The most common outcome of a debt collection lawsuit in Missouri (and any other state) is a judgment by default.

Millions of debt collection lawsuits are filed every year in local courts. In 2011, for instance, the year Capital One went to court against Evans, more than 100,000 such suits were filed in Missouri alone.

Despite these numbers, creditors and debt collectors say they only pursue lawsuits and garnishments against consumers after other collection attempts fail. "Litigation is a very high-cost mechanism for trying to collect a debt," says Rob Foehl, general counsel at the Association of Credit and Collection Professionals. "It's really only a small percentage of outstanding debts that go through the process."

Experts in garnishment say they've seen a clear shift in the type of debts that are pursued. A decade ago, child support accounted for the overwhelming majority of pay seizures, said Amy Bryant, a consultant who advises employers on payroll issues and has written a book on garnishment laws.

"The emphasis is now on creditor garnishments," she says.

Bryant also says the rise in garnishments has become an unanticipated burden for employers.

"It becomes very complicated," she says, particularly for national employers who must navigate the differences in state laws. "It's very easy to make a mistake in the process." If an employer does not correctly handle a garnishment order, she says, it can become liable for a portion or even the entirety of the debt in some states.

The burden was enough to prompt the American Payroll Association to request in 2011 that the Uniform Law Commission draft a model state law on wage garnishment. Bryant said employers are hoping that the new law, which is still being drafted, will be adopted by a large number of states and reduce complications.

What's it like for a family trying to live on wages reduced by old debts? On Tuesday, NPR and ProPublica will examine how much creditors and debt collectors are allowed to take from debtors' wages and bank accounts, and how it impacts their lives.

If you have first-hand experience being sued over a debt, NPR and ProPublica would love to hear from you. Use this form to send a tip confidentially. A reporter may follow up with you.

consumer debt

garnishment