The Truth and Law about "Voluntary Wage Assignments&amp

Thanks for that info! I bookmarked it for future reference!
Again thanks,
Ang

A good read that everyone should be aware of.

Here is the text of the page for archiving on our site.



http://www.ftc.gov/bcp/conline/pubs/credit/crdtrul.shtm

This is very good to know, thank you PDLInvestigator :mrgreen:

That doesn't really mean much - It just says that a contract can't have a wage assignment provision unless it can be revoked, which is the whole point of a voluntary wage assignment . . . . .

Goudah,

I do respect you are the moderator, but I have to disagree with your comment. They do mean a lot if you are inquiring about how Voluntary Wage Assignment work. I work for a law firm that fight these assignments from PDL (store-front in Canada). We, on a daily basis, get calls from consumers in the States asking about assignments and how they can be revoked. Assignments can be revoked both by fax, mail (Certified and/or Registered). If the PDL sends this request to an employer, the law in Canada states that the employee must be notified that a request has come through about a Voluntary Wage Assignment. All the employee has to do is tell the employer that the matter has been looked after and to disregard the assignment because the copy that is sent to the employer is invalid because the debtor did sign the assignment in person.

A PDL cannot use "Voluntary wage assignment" are not allowed because of these things:

1. They must be signed in person in front of the creditor; Which they are not

2. You can revoke them at any time;

3. Electronic wage of assignments are not valid Checked with the Federal Trade Commission and it was confirmed September 21, 2007

Great information. We appreciate every ounce of new info here.

I, also, like Anthony think this is very good and helpful information. Actually, i'd like to reinterate a story to u from a lady here on our forums... She has found herself in the pdl trap and finally found this site... after defaulting on one they sent a wage assignment to her HR dept. The HR head was an atty and told her that she HAD to honor this assignment as it is the law!! She tried her best to fight the HR lady but last i heard to NO avail... Last i know of they are indeed garnishing her wages with NO court order cuz of this hr lady!! So my personal opinion is this information cud help her tremendously!
And if u have any opinions to offer on this case plz do and i will let her know to check this out!
Thanks again,
Ang

I'm sorry, I didn't mean that as it sounded . . . I was having a bad day at work and wasn't reading what I typed before I posted. My apologies . . .

I just meant to say that this information was already on the site about wage assignments - The excerpt Cajun posted only mentioned the fact that they must be voluntary. There are a few more requirements for wage assignments too that are never followed. Like if you are married your spouse must sign consent too.

The problem is that most HR people don't know this. Most wage assignments are put through because of uneducated HR people. That is what the pdl's depend on. They make "offical" looking documents are trick employers into paying up. Just like these pdl's don't follow the laws on other matters, they don't follow the laws on these. I know of several occasions where even when state law specifically stated wage assignments weren't allowed, an employer still put it though. That is the biggest hurdle with wage assignments.

Here is a curveball for yall to think about.If a illegal company sends a assignment and you have already notified said company and your employer of this information,would not employer be on hook for processing this document without some sort of due diligence on their part. This ought to spark some legal debate. :lol:

I agree - I know of one person in my state, where they are flat out illegal, who had their employer honor the assignment. The labor dept got involved, and the employer had to refund the money. And you know they aren't going to be getting that money back from the pdl, so in essense the employer ended up paying the payday loan.

If you had already notified your employer of your revocation, and they still honored the assignment, they would absolutely be responsible. Now, if you hadn't notified the employer before hand, they may have some wiggle room, depending on your state law. Some state's do not require the employer to notify the employee, since it's voluntary it's assumed the employee is aware of it already.

Hummm... well Kate outta love this thread! SHe definately let her HR dept know that she had revoked the wage assignment, yet teh atty hr head said it was indeed legal! She tired arguing and arguing with her but last i spoke to her they were gonna start garnishing her next check. That was about a month or so ago!
I'll pass this on to her.
Thanks guys,
Ang

Attorney in HR needs a new job because an assignment is voluntary and not required to comply.Whereas a garnishment is mandatory and you are sol if you catch my drift.

Well i will definately send her to this thread soon as i can!
And i got ur drift cajun!
:lol:
Ang

Ang, I've already sent Kate a law for her state saying that wage assignments aren't legal in the first place.

Ang - Last I heard she had it worked out I think . . . . I'm trying to remember but I'm pretty sure she ended up winning.

Ahh have u goud? But i feel bad for her, what's she to do? It seems this HR atty woman, whoever was determined to garnish her wages!
It's SO frustrating!
SIGHS,
Ang

She has been given all the help she could need - At this point if her employer is still going to do it (but I think she ended up winning) she would have to hire a lawyer. They are breaking several laws by allowing it to go through. Wage assignments are flat out legal in her state.

Flat out legal or ILlegal? Well I haven't talked to her since the next week they were gonna start taking the money so maybe she did win after all.... i sure hope so for her sake!
:D
Thanks goud,
Ang

Thank you PDL, Cajun, and Goudah for this thread. PDL the information was great. Cajun and Goudah, the clarification is great. PDL, thank you for spelling it out in english (for people like me!). I was extremely interested in this for the fact that a wage assignment was sent to my employer. Everything is okay, but having this information to print out and include with all my "notes" regarding everything else I have regarding pld's is awesome. Thank you guys so much! I know this will help others and I know I'll have it handy for myself! Great information! :D

Just want to share my take on the matter, though it will make me out to be the bad guy here.

Many of you know that I run an auto-finance company. We also do some personal/unsecured loans. On the unsecured loans, we make our customers sign a voluntary wage assignment in case of non-payment.

Prior to the actual loan closing, when we first receive the initial credit application and before we make an approval, we call the employer to verify employment. At that time, we explain that the customer will be signing a voluntary wage assignment to secure the debt and we ask payroll if they would honor it if we ever need to use it. If payroll says "court order only," many times we will turn down the application.

Now, when it comes time to use a wage assignment, we aren't "wage happy" as to anyone who is a day late. When an account becomes delinquent, we will send letters out and make phone calls. If a person calls us back and makes arrangments, I am fine with that as long as the customer develops a plan to become current and they stick with it. I send a wage assignment only when we have made numerous attempts to contact the debtor and their own inaction makes it apparent that they are ignoring/avoiding their obligation.

After I send a wage out, I might have 1/50 customers who subsequently revoke their wage assignment. Which is their right to do, and I will cease my efforts on that ground - at that point I will send a release to the employer.

However, it is my experience that any debtor revoking their wage assignment, has never come back to make any sort of arrangements or payment on the account. And so it has become my policy that, once a customer revokes their wage assignment, I send it right out to my attorney for a lawsuit. 8/10 times he will get a judgment and it ends up being a court-order wage garnishment anyway - and so now the whole incident has cost the debtor my attorney fees and court costs (which can be anywhere from $450 - $800).

I understand this original post, as it relates to online PDLs - for they are inherently illegal and don't comply with the laws anyway. But in my main point, I am trying to impress that when you are dealing with a legitimate/legal lender, revoking a wage assignment is not a quick fix-all to get the creditor off your back - and it may come with costly consequences.

Thanks for your information, Debtcruncher. But question for you: I understand totally why you would have to go after a delinquent debtor in court for non-payment, but why a wage assignment? Wouldn't it be better, since you run an auto-finance company to do a repo if you need to?
The only companies I have ever heard of using the wage assignment are PDL's, and specifically offshore PDL's, especially the Canadian one that PDL investigator is talking about. I have never heard of a legit lender using this before now, so this is very interesting to me.
And if someone had their wages garnished after revoking a VWA, I would advise them to run, not walk to the State Labor Board and file a claim.

I read debtcrunchers response with great interest. And, no, debtcruncher, this posting does not make you the "bad guy". Actually, I find it very interesting. The way debtcruncher handles voluntary wage assignments is apparently in a legal manner. By this, I mean, they contact the employer beforehand and check to see if they would even honor it. Okay. Sounds reasonable to me. At least he's upfront about it, not hiding it, or trying to sneak anything past anyone. And stating exactly what steps he takes regarding this is interesting and informative. I think I'm so interested because the only experience I've had with any type of voluntary wage assignment is with illegal companies. Not legal ones. So ks's question brings up another interesting matter. I have never heard of a legal company doing wage assignments; however, we learn something new every day. I find this very interesting. Finally, a legal company who uses voluntary wage assignments and gives us information regarding it. I think it's great! But I would like to know, how many legal companies do this? And, debtcruncher, when you have people come to your company & they sign the voluntary wage assignment, do you make it a point to "point it out"? Or is it just in the contract "somewhere" so they may not be aware? I'm really curious, as you are with a legal company. In regards to the illegal companies, it's just kind of "stuck in there somewhere" and you're really not aware if you've signed such a thing or not. Thanks for the information, and if you could, please answer as to if you point this out to your customers. I'm thinking you probably do. Which is NOT what the illegal companies do.

kscornell-

I'm not quite sure I understand the first part of your question. Do you mean why would I go to court over somebody revoking their wage assignment? Keep in mind, the accounts are already severely delinquent and we've already made numerous phone calls/letters before we send a wage out. These are customers who haven't made any sort of payment in 3-4 months, and who haven't made any sort of contact with our office about their account. When they revoke their wage assignment and I sue them - I'm not suing them because they revoked a wage assignment, rather I'm suing them because the account is delinquent and I deem myself insecure -- the revocation is just the final straw that leads me to that point.

If a customer revoked their wage, yet kept making payments, I would have no problem and no reason to sue. But, like I said, it is my experience that no debtor has ever revoked their wage and then come back to make a payment afterwards. And so rather than leave it in my collectors' hands for another 6-12 mos, where our efforts will be fruitless, instead we send it to the attorney for suit.

You're right that, when a vehicle is involved, a repo would be the next logical step instead of court. We do go that route when it is a car loan. But a number of our loans are unsecured, and so there is no collateral to repo. In those cases, court is my only option.


Cannr, you're up next ...

Cannr-

I'm glad you don't see me as the bad guy. And I'm glad to peak your interest when I can.

Regarding how many legal companies use them ... I can't speak for other states since I only operate in Illinois. I would say banks and credit unions probably don't use them, but middle-tier companies like me do. I do know that most of my Illinois-based competitors also use wage assignments.

It is definitely not something that is "hidden away in the fine print" of the contract. Illinois has its' own laws specifically regarding the use of wage assignments ((740 ILCS 170/) Illinois Wage Assignment Act). Namely, it needs to be a document completely separate from the contract, and "The words 'Wage Assignment' are printed or written in bold face letters of not less than 1/4 inch in height at the head of the wage assignment and also one inch above or below the line where the wage????????earner signs that assignment".

Below, I am going to attach a copy of a "real" wage assignment - the same form that my customers would sign in the office. You will see, there is no mistaking this form for something else, and there is no way to hide it in the fine print somewhere. I definitely have to make a point of it to my customers so that they know what they are signing. (In 6 years since I've been closing loans, I've only had 1 customer cancel the whole deal because they didn't want to sign a wage assignment).

If you actually read the wage assignment, it says right in the second paragraph that the debtor may revoke it at-will.

Now, I am not familiar with the way a PDL tries to use a wage assignment. I will agree that if they are not following the laws, by no means should the assignment be enforceable. It actually makes me mad a bit, because their illegal tactics make a bad name for the legal ones.

Illinois Wage Assignment (Form)

Thanks Debtcruncher for all the usual information. I have learned quite a bit reading this thread!

debtcruncher, this is awesome! I can not thank you enough for all of this information and also for including a copy of a REAL LEGAL wage assignment! No, there is no mistaking that this would be an "oversight" on the part of the person signing it! This is so incredibly opposite of the way the illegal pdl's do it. There is no separate document. There is nothing except in the nice small print "somewhere" on their illegal contract regarding wage assignment. And the fact that you are explaining to them what they are signing, how much more legal can you get? And, as you pointed out, it does state that it can be revoked. OMG. I am amazed at the difference between the legal and illegal wage assignment issue. You have been an incredible amount of information here! I hope everyone sees this thread so that they are aware of the legal way of doing things versus the illegal way of doing things. Thank you, debtcruncher, for taking the time out to explain the way you guys handle it and for taking the time to show us what your document looks like. I know it opened my eyes to the huge difference in the way the illegal pld's handle it. I know it'll open quite a few eyes from others once they read and see this. Thank you so much!

Thanks, Cannr, for your kind words.

Another thing, too, is that we don't just send this form into payroll and say "you have to start paying us now..." There are steps that need to be taken for it to be valid.

1) Before we can even think about using a wage assignment, we have to send a "Notice of Intent" to the customer (regular mail) and employer (cert mail). The intent must inform the customer and employer of the amomunt past-due, and state that the customer has 20 days to bring the account current before we can follow through with the wage assignment. We cannot take further action until these 20 days are up.

2) Along with the Intent, we have to mail out an "affidavit of defense." Is it a fill-in-the-blank kind form, and if the customer doesn't want a wage assignment to go through, then they fill out the form and mail it back. At that point, we cannot go through with a wage assignment, by law.

3) After the 20 days are up, we have to mail a "Demand" (Certified) to the employer. The Demand would state the exact amount that is owed. It would be signed by someone from the company, and needs to be notarized. It also needs to include a copy of the original form that the customer signed.

Without any of these 3 things, payroll should not be touching a person's wages. The laws are very clear on what steps must be taken ... e-mails, electronically-signed forms, or any other documents are simply not acceptable.

I would say a good payroll person should be able to clearly distinguish between a real wage assignment, and the PDLs version. I am sort of astounded that the PDLs could actually convince payroll to follow through with their wage assignments.

debtcruncher, this is incredible! The steps you guys take to even attempt to do a wage assignment is a long process! And a nice legal one, at that. The illegal pdl's just include "somewhere" in the contract that you agree to wage assignment. Now many people don't even know what that means first of all. Plus the fact that it's not separate from anything, not mentioned that it can be revoked, etc. You fight and fight with an illegal pdl and then they send a wage assignment (which looks so totally different than your legal one) that we've never even seen before straight to your employer. Period. No steps in between. I guess that's what the illegal pdl's consider legal. We revoke these wage assignments; however, they send them anyway. And, yes, the employers that honor these wage assignments just burn me up. Basically what it says is that "you" have authorized your employer pay your debt. And it says "electronic signature" and it states your social security number. And, of course, it says "Send xxxx dollars to xxxx address. Isn't that wonderfully illegal? Now my boss would probably walk up to me and say "What the hell is this???" But some employers (just kills me!) say they have to honor it (no, they don't) even though the poor employee has told them and shown them that they've revoked it. Now, do you see why we are all so paranoid about wage assignments? They way you guys do it and the way the illegal pdl's do it are two different worlds. You're information just astounds me. I suck up every single word you post because it's such a vast difference! The main thing, obviously, is that employers need to be educated. But illegal pdl's just don't come up during lunch hour "chit chat". LOL! debtcruncher, this is a wonderful thread. I am so glad that you decided to share your experience with us. This shows us the way a wage assignment should be handled. And I just wanted to tell you the way the illegal pdl's do it. Completely different. I can imagine that you're probably sitting there going "What??" :shock: And, that's pretty much how we react to it also!

Wow! Thanks for that info...you have a very calculated process and it blows my mind that the PDL's just send in a piece of paper without any of these steps.

Another thing you can see from the example DebtCruncher posted - It says Wage Assignment in HUGE letters. Most state's that allow wage assignments specify in their laws that the words wage assignment must be in a certain size type, so that it can be easily seen and jump off the page. That way there is no "mistaking" what they are signing.

Thank you for posting this. I have learned so much and it has eased my fears a little. This is such good information for many of us.

Thank you so much for all the info. I am sure it will help a lot of members. It may be a good idea for some to print it out, so if they need to show it to their empoyer at any time it is readily available,

Yeah, educating the employer can very well be the hardest part of dealing with a wage assignment.

If you are dealing with a wage assignment, also check your state law. Many state's have prohibited wage assignments.

Debtcruncher,
Thanks again for this information. This is excellent information and frankly, I never thought that any company besides an IPDL would use one, but I certainly stand corrected here. And yes, I can see where you would have tried every option before going this route--unlike a PDL, which would be shady, as we know.
I only asked you about repos because I thought you said you only made auto loans, but I also stand corrected!

Does anyone have a sample of a wage assignment letter? Not a revocation, but the letter of assignment. And are they legal in texas. Thanks.

email removed for your protection - Goudah

In Florida wage assignments are illegal but one employer honored one anyway even after being shown the law. Florida has no State Dept. of Labor and the Feds would no get involved with state law so the empoyee was SOL. (I don't mean satute of limitations)

My experience with a wage assignment...about two years ago a IPDL sent a letter to my HR dept. The head of payroll called me and told me of the letter...I had not revoked it..I had never signed one. But she told me she would not honor any wage deductions of any kind unless initiated by me or a court order.

Interesting thread.

I definitely appreciate this thread, NOW I understand the concept and legalities of wage assignment. THANKS!!