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Urging Congress to Prevent Creditors from Garnishing Social Security Funds and Encouraging Pro-Bono Assistance with Zombie Debt Cases


WHEREAS, credit card collection actions which are filed after the statute of limitations has passed are called Zombie Debts. They are referred to as Zombie Debt Cases because collection agencies which buy these debts, for pennies on the dollar, are filing lawsuits to bring the debts, metaphorically, back from the dead; and 

WHEREAS, when collection agencies buy large volumes of aged debts, they do not receive the documentation that would be required to prove up the debt in court, like the original signed contract or any evidence of how the debt was incurred. Collection agencies file literally thousands of Zombie Debt cases in courts every year. In a large percentage of the cases, they receive default judgments; and 

WHEREAS, Zombie Debt cases are frequently filed against low-income senior citizens living on social security. Both federal and state law provides that social security income in exempt from execution because recipients of social security benefits need their social security to survive. When the plaintiffs in Zombie Debt cases obtain judgments against senior citizens, they regularly garnish their social security bank accounts.   Unfortunately, the burden is on the garnishee to raise the exemption issue to stop the garnishment; and 

WHEREAS, because many seniors do not have the money to hire an attorney to raise the exemption, the exemption is almost never raised and funds from their bank accounts are taken. Most often this results in a financial crisis for great numbers of senior citizens. 

THEREFORE, BE IT RESOLVED, that the NAACP will urge the United States Congress to enact legislation to prevent creditors from garnishing or freezing social security funds and other exempt funds; and 

BE IT FURTHER RESOLVED, that such legislation shall "order the Department of the Treasury to promulgate regulations ensuring that its Automated Clearing House (ACH) codes clearly identify exempt federal benefits, require creditors excepted from the ban on garnishing benefits to indicate their favored status on the garnishment order, require banks to assert exemptions on behalf of depositors, [require the implementation] of an accounting system that enables banks to identify the specific dollar amount of funds to exempt within an account, and provide for administrative enforcement in addition to a private right of action; and 

BE IT FINALLY RESOLVED, that the NAACP will encourage attorneys, law firms and bar associations to provide pro bono assistance to low income citizens facing Zombie Debt cases. 

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