Late last month, Kim Boatswain sat down at her computer in her southeast Austin home and logged into her credit union account. Her bills and mortgage were coming due soon, and she needed to move money from her savings to checking so she could pay them.

The chauffeur and grandmother of three, who hadn’t been working because of the COVID-19 crisis, said her savings account had been newly padded with a $4,900 tax refund. Now, it showed a negative balance.

She drove to the credit union to find out what happened, only to be told that staff members weren’t allowed to explain why. They handed her a number to call, which turned out to be for a debt collection law firm. She spoke with a man there who tersely explained that she had owed money to Wells Fargo since 2006 — he didn’t tell her what it was for. The bank had sold off the debt. It was now owned by a client of the law firm who was trying to collect.

“I couldn’t understand it,” Boatswain said. “I said: ‘What do I need to do? That’s money for my mortgage. I can’t even eat.’ He didn’t care. I was crushed.”

The man said he’d look into a solution, but the next time they spoke he said their client wasn’t interested. “We already have your money,” Boatswain said he told her.

Boatswain later got a pro bono lawyer who is still trying to dissolve the so-called writ of garnishment that led to seizure of every dollar in her savings account.

Her bank account and those of other Texans were seized by debt collectors just before the Texas Supreme Court temporarily banned the practice this month.

The elected, all-GOP court did so after receiving a proposed order that had been negotiated between legal aid groups and creditors’ attorneys. Those pro-bono lawyers who advocate for indigent Texans were concerned that predatory debt collectors would try to raid bank accounts as soon as the federal government began to deliver much-anticipated stimulus payments to qualifying Americans — up to $1,200 per person and $500 per child.

Texans have the second-highest rate of debt in collections in the country and are uniquely vulnerable because the state’s consumer protections for bank account garnishments are virtually nonexistent.

The Supreme Court order, under which bank accounts cannot be frozen and new writs of garnishment cannot be served until May 8, is intended to last long enough for debtors to spend their stimulus money on necessities before facing collection of medical, student loan, credit card and other types of debt.

But Texans like Boatswain, whose accounts were garnished just before the order took effect, have little recourse. Their accounts may remain frozen in many cases, so stimulus checks and any other money they have is at risk of being seized by debt collectors during the worst economic and public health crisis in recent memory.

And millions of Americans aren’t expected to receive their money for months as the underfunded IRS struggles with logistics — or because they’re waiting on paper checks whose arrival may be delayed because of a last-minute order to print President Donald Trump’s signature on them.

State and national legal aid groups and advocates for low-income people say the Texas court wouldn’t have had to step in if Congress had exempted stimulus checks from garnishment under the CARES Act, the trillion-dollar legislation that authorized them.

They unsuccessfully urged lawmakers to do so in the next stimulus bill that they are considering this week. Meanwhile, a bipartisan — but mostly Democratic — mix of U.S. senators and about two dozen state attorneys general also haven’t had any luck persuading U.S. Treasury Secretary Steven Mnuchin to use his authority to address the issue.

“It’s not too late for Congress to make clear that the stimulus payments can’t be grabbed by debt collectors who are trying to take food out of the mouths of desperate families,” said Lauren Saunders, associate director of the National Consumer Law Center, on Tuesday.

If Congress fails to act, it’s unclear what will happen in Texas in less than three weeks when the court order expires. Some groups that represent debt collectors and buyers, including the National Creditors Bar Association, have encouraged their members to avoid collecting stimulus payments. On the other hand, the nation’s largest debt collection trade organization, ACA International, has sued Massachusetts over a similar debt collection ban.

Other groups acknowledge the industry may have its rogue actors but also say that it needs to get back to work eventually just like everyone else.

“Where do you draw the line?” asked Craig Noack, a longtime debt collection attorney and president of the Texas Creditors Bar Association, which negotiated the proposal with legal aid groups that resulted in the Supreme Court order. “Our entire economic engine requires there be consequences for failure to pay a judgment.”

Strong Protections. Yet Consumers Remain Vulnerable.

Authority-averse, property rights-centric Texas has strong debtor protections that date to the beginning of its history as a state. Laws place strict limits on the collection of wages, homesteads, retirement accounts and other assets, including cars. But bank accounts are a different story.

Texas is one of only four states that doesn’t allow wage garnishment, a restriction that many advocates for the poor say is crucial, but that also makes creditors significantly more dependent on bank accounts as a way to collect on debt. And in a report late last year, the National Consumer Law Center gave Texas an “F” grade for bank account protections.

“Texas would rate an ‘A’ grade except for its failure to provide any protection for the debtor’s bank account,” the report said.

Other states have set minimum balances for accounts so that debtors’ accounts are never completely wiped out.

“Forcing someone to default on all current financial obligations by freezing their full account balance in order to pay an old debt is not good policy,” said Ann Baddour, director of the Fair Financial Services Project at Texas Appleseed, a nonprofit that advocates for reforms to protect the most vulnerable residents of the state. She described Texas’ lack of bank account protections as “a big hole” in an otherwise debtor-friendly system.

The state also has notoriously weak consumer lending protections — it’s one of only a few in the country that places no caps on charges for payday or auto title loans.

Yet as stimulus checks began to land in Americans’ bank accounts last week, Texas remained one of only a few states that had explicitly banned private debt collectors from raiding them.

Advocates across the country pushing for similar protections have pointed to the state as a model. The Texas Supreme Court order, however, only bans the service of new writs of garnishment and will likely expire before many Texans receive their stimulus money.

For accounts that have already been targeted for garnishment, the order says “the parties are strongly encouraged to reach an agreement on the garnishment, and courts are encouraged to aid and facilitate a quick adjudication.” That is a difficult feat for a debtor to pull off without a lawyer — and with significantly minimized court operations.

“Right now, you cannot just walk into the courthouse,” said Boatswain’s attorney, Amy Clark of Texas RioGrande Legal Aid, which took the lead on negotiating the proposed court order with Noack’s group.

That makes it much harder to challenge garnishments at any stage of the process, she said, because it can be difficult to obtain and file documents and collectors can still file for garnishments whenever they want — no hearing is required.

“If there was anything done incorrectly — a lawsuit never having been served, fraud, any aggressive collections taking place — there’s little opportunity for the debtor to speak up,” she said.

If attorneys can’t get through to the courts, their clients’ accounts can remain frozen — or empty. And any stimulus funds deposited can be poached by creditors or even banks before a judge can hear the case.

Fortunately for Boatswain, the writ only froze her savings account, which had enough money to satisfy the nearly $5,500 sum the debt buyer was seeking — the majority of it from her $4,900 tax refund. Her much-anticipated stimulus check, which came last week, was deposited into her checking account, which remains accessible.

It was a huge relief because it’s the only cash she and her husband have.

“That’s it,” she said. “I was able to pay my March mortgage because my kids stepped in to help me.”

Noack, the debt collection attorney, noted that the dissolution of existing writs of garnishment like Boatswain’s was seriously considered during the recent negotiations. “The spirit was there,” he said. But the parties ultimately agreed the state Supreme Court would likely view it as unconstitutional.

Baddour, from Texas Appleseed, said the order “is still very important and impactful, but it does leave a number of people’s access to the stimulus check vulnerable to the whim of debt collectors.”

Carla Reece, director of collection litigation at Pittsburgh-based Lawgix Lawyers, whose sister firm Thomas Michael Jr. & Associates is representing Boatswain’s collector, said she couldn’t comment on the case for privacy reasons. But she provided court records upon request that included a years-old default judgement against Boatswain that said she was served with a citation and failed to respond.

“You may note that the garnishment was initiated in February, and thus could not have been aimed at reaching a stimulus check,” she said in an email.

“During these difficult times, our organization is working with consumers to accommodate their changed circumstances,” Reece said. “The firm has always had hardship policies which have become more robust under the present circumstances.”

ProPublica and The Texas Tribune found that the debt buyer, listed in court records as “Ecco 2018 TX1 as Assignee of Advantage Assets II,” has recently filed more than a dozen writs of garnishment against Texans in four counties — including 10 last week in Harris and Tarrant. While filings are still allowed under the order, they are not supposed to be served until the order lifts.

Reece didn’t respond to follow-up questions about the other cases or give specifics on how the firm is helping defendants whose financial situations have deteriorated because of the pandemic.

Tracking Debt Collection in Texas

It’s impossible to say exactly how many other Texas debt collectors are either still filing for garnishments or were able to secure them just before the order took effect.

That’s because a lot of the state’s 254 counties — including some of the largest — don’t post case filings online for justice courts, where a majority of writs of garnishment are filed. A ProPublica-Tribune analysis of court records in four of the counties that do post justice filings — Denton, El Paso, Harris and Tarrant — paints a mixed picture of garnishment activity during the pandemic.

In Harris County, home to Houston, debt collectors filed 26 writs of garnishment in the month leading up to the issuance of the Texas Supreme Court order April 9. During the same period in 2019, they filed for 82. But in Tarrant County, home to Fort Worth, garnishment filings have kept pace with last year, with debt collectors filing for a total of 24 writs in that monthlong period in both 2019 and again this year.

This month, Tarrant County Justice of the Peace Lisa Woodard said in a statement that she had “noticed an uptick in the amount of writs of garnishment filings of post-judgment debt collection cases.”

“I stopped signing them due to the inescapable fact that we’re in the middle of a crisis,” she said. “This is not the time to freeze someone’s bank account. If this happens, it will block an individual’s receipt of a stimulus check.”

In Denton and El Paso, the courts lump in writs of garnishment with other types of debt cases, so it’s difficult to know how many there are.

Overall, the ProPublica-Tribune analysis shows that hundreds of writs of garnishment have been filed across the state in Texas’ 10 largest counties since Jan. 1. Those include writs of garnishment for commercial debt, which are not protected under the order, to the chagrin of struggling small-business owners.

Many of the targeted bank accounts could be temporarily inaccessible while the bank analyzes recent deposits to see if they can be garnished or until the debtor and collector reach an agreement on a payment plan. Any money deposited under certain federal benefit programs, including social security, is off limits.

Celeste Embrey, general counsel at the Texas Bankers Association, said that banks couldn’t refuse to release stimulus checks to collectors even if they wanted to because they’re technically defendants in garnishment cases.

A Patchwork of Policies

Legal aid attorneys across the country said in interviews that their indigent clients — from members of the military to elderly widows — are facing similar dilemmas.

Virginia hasn’t banned new garnishments, but the issuance of new writs has largely stopped because courts have ceased nonemergency activity. Attorney David Likavec of the Legal Aid Society of Eastern Virginia is representing a 39-year-old woman facing a similar situation to Boatswain’s — out of work because of the pandemic and unaware that a collector had obtained a default judgment against her years ago when she lived out of state.

“Basically the residents of Virginia are in the same position as those in Texas — no new garnishments are being filed, but those people that have frozen accounts already are stuck with their stimulus checks being at risk,” Likavec said.

Likavec said he was able to work out a deal with the collector, who sought about $1,600 plus attorney fees. But he and his client are still waiting on a judge to sign off on the agreement before she can access her much-needed stimulus funds, which were deposited last week into her frozen account.

Meanwhile, new bank account garnishments appear to be continuing in states like New York, where New Economy Project Legal Director Susan Shin said her group is “hearing from so many low-income New Yorkers who are having to deal with wage garnishments and frozen bank accounts that are severely undermining their ability to cope with the crisis.”

The state “hasn’t yet put a stop to garnishments, current or new,” Shin wrote in an email. “It’s terrible that we’re lagging behind other states on this when we’re the epicenter of the crisis.”

Debtor and creditor advocates alike agree that the patchwork of state policies is largely a byproduct of the CARES Act. While it bans the government from collecting checks to cover back taxes or other debt owed — except for past-due child support payments — it does not exempt collection of stimulus checks by private debt collectors.

Consumer and legal aid advocates like Shin are also bracing for the possibility that credit unions and banks, which have been given the power to seize stimulus payments to cover outstanding overdraft fees and other debts, will also take advantage.

That may not fly as well in Texas.

Any bank that seizes stimulus money for its own benefit faces a “significant reputation risk,” said Karen Neeley, general counsel of the Independent Bankers Association of Texas, who said that the money “darn sure ought to be” protected from private debt collectors, too.

“Not the Time to Be Doing That”

How quickly debt collectors will get back to pursuing bank account garnishments once the State Supreme Court order expires remains to be seen — as does whether the court will choose to extend it.

Osler McCarthy, a spokesman and staff attorney at the Texas Supreme Court, said the court is “not yet considering whether to extend the existing deadlines for garnishment proceedings that are weeks away.”

“Anything it does will take into consideration what’s best for the state, as was the existing order itself,” he added.

Noack, of the state creditor’s bar association, questioned whether an extension was necessary as long as a majority of Texans get their stimulus payments on time.

Plus, he said, he believes most of the industry will cool it on aggressive debt collection as long as the pandemic lasts, noting that major creditors and law firms voluntarily stopped pursuing bank account garnishments weeks before the court order took effect.

Most “know now is not the time to be doing that,” he said. And “if you’re thinking about it intelligently as a creditor, do you want to seize someone’s account when they have no money in it — or after they’ve gone back to work?”

For Boatswain, the timing could not have been worse. She took a leave of absence from her job in December to care for her mother after a surgery and decided not to go back to work as the new strain of coronavirus quickly spread through the country. She and her husband had been living on his salary as a truck driver, and money was tight.

But the day after Boatswain discovered the bank account freeze, he was let go from his job.

“It’s just been a nightmare,” she said. “I can’t wait for this to be over.”

Sally Beauvais contributed reporting.

Correction, April 22, 2020: This story originally misstated the title of Susan Shin. She is the legal director of the New Economy Project, not the director.

Update, April 22, 2020: This story was updated to include information from court records provided by a firm representing Kim Boatswain’s collector, and to clarify Carla Reece’s job title.

Update, April 30, 2020: On Wednesday, the Texas Supreme Court extended the ban on new bank account garnishments until after May 25. Under its original order, the court had said collectors could not serve banks until after May 7. Writs of garnishment may still be issued, however.

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