8 States Move to Curb Wage Garnishment for Medical Debt

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Lawmakers in at least eight states have introduced legislation in the past year to limit wage garnishment for medical debt. The bills, introduced in Colorado, Florida, Hawaii, Indiana, Maine, Michigan, Ohio, and Washington, build on efforts in other states to address the issue of creditors seizing a portion of an individual's earnings to recoup unpaid medical bills.

Why it matters

Wage garnishment for medical debt can be a significant burden on workers, leaving them with less take-home pay and potentially making it harder to make ends meet. These new state-level efforts aim to provide more protections for consumers facing medical debt collection.

The details

Courts approve about 14,000 wage garnishment requests in medical debt cases each year in Colorado alone, involving a range of healthcare providers. While wage garnishment is one way creditors can recoup unpaid bills, several states also allow them to garnish bank accounts or place liens on homes. Creditors are typically required to obtain court approval before requiring an employer to withhold a portion of an individual's earnings.

• In the past year, lawmakers in at least eight states have introduced legislation to limit wage garnishment for medical debt.

What’s next

The new state-level legislation is still in the process of being introduced and considered, so the ultimate impact remains to be seen.