Abstract: Business and the Evolution of Debt Collection Laws: Garnishment and Wage Assignment in Illinois, 1880-1930

Bradley A. Hansen and Mary Eschelbach Hansen

Abstract

In the 1870s and 1880s legislation and court rulings combined to make the wages of a head of household almost completely exempt from garnishment in Illinois. Yet by the 1930s, Illinois was regarded as one the states where it was easiest for a creditor to claim a large share of a debtor's wages. We argue that the driving force behind the evolution of garnishment and wage assignment in Illinois was the conflict between two groups of business people: large employers and businesses that supplied credit to wage earners. Large employers regarded garnishment and wage assignment as costly nuisances and sought to restrict their use. Businesses that provided credit to wage earners regarded garnishment and wage assignment as important tools and sought to minimize restrictions on their use. Each group pursued change through legislation, through the judiciary, and through private contracting. Because the conflict between large employers and businesses that provided credit was meditated through the political and legal systems, the outcomes were also shaped by the influence of other interest groups and by the ideologies of judges. By the 1930s, this combination of forces left Illinois with a relatively moderate garnishment law but virtually unrestricted use of wage assignment.