State To Halt Wage Garnishment, Driver’s License Revocations, Other Financial Levies

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Kentucky Gov. Andy Beshear has directed the Department of Revenue to pause enforced collection methods while the state deals with the economic fallout of the coronavirus.

The move was in response to questions asked about the state’s use of wage garnishments to collect medical debts on behalf of the University of Kentucky’s health care system.

A KyCIR investigation found that the revenue department’s enterprise collections office adds the highest such fees in the country — currently, 7% interest and a 25% collection fee to debts referred to it by UK and other state agencies.

“A whole lot of things that seemed pretty important a couple weeks ago are just not going to be as important going forward,” Beshear said at a press conference on Monday. “I don’t want to be garnishing wages during this period of time.”

Jill Midkiff, a spokesperson for the Kentucky Department of Revenue, said in an email to KyCIR that the department has taken the following measures:

1. All new bank and wage levies were stopped as of last week.
2. DOR will be releasing ongoing wage levies. A program is currently in development to do this automatically as the volume is too high to do this manually in a timely manner.
3. Releasing all state claims.
4. Releasing all driver’s license revocations.
5. Releasing all vehicle registration revocations.
6. If a taxpayer, individual or business calls to report that they cannot make their installment payments due to this emergency, payments will be put on hold for three months.

Midkiff said the department currently has nearly 15,000 wage levies and over 6,700 driver’s license revocations in place that will be released as a result of this order from the governor.