Many of us in Florida are familiar with the debt collection practices of the credit card companies. Despite laws that prohibit such actions, many credit card companies and other creditors engage in harassment. One of the options a credit card company can legitimately use however is wage garnishment.
Unfortunately for a stock broker, his wage garnishment was not only a cash flow inconvenience, it also reportedly cost him his job. Although his case is a bit unusual, it provides a warning to anyone who has significant credit card debt who may be subjected to wage garnishment.
In many professions there are agencies with rules and regulations related to how one performs a particular job. For stock brokers, the regulatory agency is FINRA, the Financial Industry Regulatory Agency. In addition to the financial industry there are other industries which are highly regulated for a variety of reasons, such as the medical and pharmaceutical industries. Apparently FINRA has a rule that mandates full disclosure of any legal judgments.
The stock broker in this story had $21,721.17 in wage garnishment judgments which was a surprise to his employer and that included $10,957.66 in unpaid credit card bills. The man’s employer gave him a warning notice regarding full disclosure and that could have been the end of it.
Unfortunately, four other wage garnishment judgments for $54,000 in unpaid credit card bills followed the first set of judgments. This was not only against his employer’s rules; it was also against FINRA’s. The stock broker may not only have lost his job, he may have lost his ability to be a practicing stock broker.
The lesson we may learn from this is that credit card debt is not something that one should put off to handle some other day, even if a person is gainfully employed. It is best to deal with it up front, so that all that red ink does not become a pink slip.
Source: Time, “Yikes – When Debt Costs You a Job,” Martha C. White, Sept. 17, 2012