The Debt Collection Improvement Act

The Debt Collection Improvement Act (DCIA) was put into practice by the Congress in the year 1996. This act applies to debts owed to the federal government. With the introduction of the Debt Collection Improvement Act it changed the manner under which the Federal government is required to manage the collection of its delinquent debts.

The reason behind the implementation of the Debt Collection Improvement Act was the steady increase in the amount of wrong non-tax debt that was owned by the United States. It was a matter of alarm as no appropriate action was being taken to extract this delinquent tax. This law executed the government to centralize the collection process and allotted the Treasury with new responsibilities related to the same. There is a Financial Management Service (FMS) which is a part of the U.S. Department of Treasury which controls the collection efforts and is responsible of implementation of the Provisions of debt collection of the DCIA.

Congress has focussed that the management of delinquent obligations is to be centralized at the Treasury Department in order to increase the effectiveness of our collection process. The Administration strongly supported this legislation and is fully dedicated to its successful implementation. However, performance of the statute's requirements to date has not met either the President's or the Congress' expectations.


Can a Debt Collector call my Employer and Garnish my wage?

Some Debt Collectors and Agencies, will try to intimidate you into making a payment by calling your employer and threaten to garnish your wages. It is legal for the collectors to contact your employer to confirm your status, to verify your employment, your work location or confirm about your insurance policy to cover your specific debt or to garnish your wages. But the debt collector cannot disclose your debt to your employer. Doing this he is violating the Fair Debt Collection Act.

But the debt collectors can petition the court and with a judge’s signature can bully to garnish your wages. But your employer is not permitted to garnish your wages until he receives a written official document from the court ordering him to do so. But don’t forget that most threats of this nature are faking. However if you see the collector may threat you, then work out a payment agreement before you get sued. Be concern and don’t let the mater to reach the extreme as a wage garnishment is hard to reverse.

If you receive any notice from your employer regarding the garnishing of your wages, but were never served with lawsuits papers, you should definitely contact a lawyer. There are chances that the debt collectors have done some wrong and you can have the judgement overturned. But the best way to avoid lawsuit and garnish your wages altogether is by paying off the credited amounts as soon as possible before the situation turns unmanageable.