Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktI read a couple of pieces this morning that literally shocked me. Apparently in a few states the collection agencies have found creative ways to get around the rights of debtors. It’s easy really, you just file a lawsuit and ostensibly serve a notice to appear, then if and when they don’t show, voila, an arrest warrant. I could tell some stories regarding collection agencies, and maybe I will, but for now suffice it to say when we get calls here at work asking for our collection business, I’m uncharacteristically rude.
First I read this:
Take, for example, what happened to Robin Sanders in Illinois.
She was driving home when an officer pulled her over for having a loud muffler. But instead of sending her off with a warning, the officer arrested Sanders, and she was taken right to jail.
“That’s when I found out [that] I had a warrant for failure to appear in Macoupin County. And I didn’t know what it was about.”
Sanders owed $730 on a medical bill. She says she didn’t even know a collection agency had filed a lawsuit against her.
“We hear time and again from the legal aid lawyers who ultimately find out often about these people when they’re in jail that people didn’t even know there was a lawsuit against them, let alone a judgment had been entered,” Madigan told WBEZ. Her office is investigating agencies that may be abusing the law, and said judges need to be fully aware of debtors’ rights before such hearings.
Madigan said such practices could lead to modern-day debtors’ prisons, and the Illinois Department of Financial and Professional Regulation hopes to ban the practice altogether next year.
Arrest warrants for debtors are “flourishing statewide,” Madigan told the Wall Street Journal, but Illinois is not alone. The paper reports that judges in nine counties across the country have signed off on 5,000 debt-related warrants since 2010.
And then this:
With a slow economy, the number of debtors going to jail in Illinois is on the rise.
It’s illegal in Illinois to throw a debtor in jail for not being able to pay, but some creditors are getting around that. A collection agency can file a lawsuit which might require a court appearance. If the debtor doesn’t appear at the hearing, a warrant can be issued for their arrest.
Illinois Attorney General Lisa Madigan said in some cases, the court notices aren’t being served.
This one’s behind the WSJ paywall:
Illinois Attorney General Lisa Madigan, in an interview, vowed to push state-court judges to quash arrest-warrant requests by lawyers representing the fast-growing debt-collection industry. Ms. Madigan also said she will file enforcement actions against companies that “abuse” their power to seek arrest warrants under Illinois law.
“We can no longer allow debt collectors to pervert the courts,” said Ms. Madigan, a Democrat who took office in 2003.
Another WSJ piece I was able to read:
Earlier this year, Vanderburgh County, Ind., Superior Court Judge Robert Pigman asked Indiana’s highest court to review the legality of debt-related warrants after law-enforcement officials complained they can’t quickly access arrest orders for dangerous criminals because their computer system is clogged with debt cases. The Indiana Supreme Court hasn’t responded to the request.
In September 2009, Jeffrey Stearns, a concrete-company owner, answered a knock at the door from a Hancock County, Ind., deputy sheriff. The deputy was holding a warrant to arrest Mr. Stearns for not paying $4,024.88 owed to a unit of American International Group Inc. on a loan for his pickup truck.
After being handcuffed in front of his four children, Mr. Stearns, 29 years old, spent two nights in jail, where he said he was strip-searched and sprayed for lice. Court records show he was released after agreeing to pay $1,500 to the loan company. “I didn’t even know I was being sued,” he said, though he doesn’t dispute owing the money. “It’s the scariest thing that ever happened to me.”
Does anyone else find this as alarming as I do?
Filed under: Uncategorized | Tagged: collections, debtors prison, Lisa Madigan |
All Things in Moderation 
Yes. I do.
LikeLike
This comment has been removed by the author.
LikeLike
At least they're not using SWAT teams.
LikeLike
lms/Mark:It's easy really, you just file a lawsuit and ostensibly serve a notice to appear…How easy is it to "ostensibly" serve notice to appear? Doesn't notice to appear have to be served by a public official?In my town, a friend of mine is an elected constable, and from what I understand that is precisely what his job is…to serve legal notices to people. Perhaps it works differently in other places, but I don't think it would be all that easy for a collection agency could prevail upon a public official to pretend to serve notice to someone for the purposes of them having them arrested for failure to appear.
LikeLike
" some cases, the court notices aren't being served."Strange that the courts don't require proof of defendants being served before issuing warrants for arrest.
LikeLike
One quick story from the lms household. For years we subscribed to both the local paper and the LA Times. At some point about 10 years ago we got tired of the Times and canceled. They kept trying to get us back with intriguing offers and pleas, which was weird I thought, it's just a newspaper. About three years into this dance we got a notice that our account had gone to collections for failure to pay our subscription in the amount of $29. Number one it was on a new subscription we never requested, number two we never received a bill, and number three we never received the paper. It took us a year to get that off our credit report. Anyone who thinks mistakes aren't made at either the so-called debt level or the legal level is a little naive.
LikeLike
At least they're not using SWAT teams.I believe they did once for a woman who had defaulted on her student loans. Bust down the door, down on the floor, you own a lot of money for your college education!I've got a medical bill I haven't paid, because it's bogus. So, no, that doesn't sound like a good idea (it also sounds very stupid). Strange that the courts don't require proof of defendants being served before issuing warrants for arrest.Or their standard for proof needs to be revised.
LikeLike
Scott: but I don't think it would be all that easy for a collection agency could prevail upon a public official to pretend to serve notice to someone for the purposes of them having them arrested for failure to appearNever blame malfeasance where incompetence would do. 😉
LikeLike
Often these cases are heard in front of Justices of the Peace. These officials have to run for office and their campaigns are often paid for by lawyers, many of whom handle debt cases.
LikeLike
Scott, I am guessing from local experience here.1] Due process requires fair notice.2] All states have an alternative form of service of process or notice when the defendant cannot be found at his known address[es].3] A lying sack of spit collector can present an affidavit that the Defendant cannot be found at his last known address[es] in some states and thus be allowed to give notice by "publication", say in the local newspaper's classified section.In TX we have minimized abuse in two ways. The constable [not the collector] must affirm that the Defendant cannot be found after attempting traditional personal service before alternate service will be allowed; and corporations must be represented by attorneys. Collection attorneys who dabble in dishonest practices are slammed by the grievance committee and get their licenses suspended. In states where collection agencies use the small claims courts without counsel there is not a method of summary punishment for the cheaters. As LMS can tell you.
LikeLike
TMW, as I have just intimated, it is unusual for a lawyer to seek to subvert the notice and process of personal service system in place. It is too costly for the lawyer. For a party willing to lie, it is not hard to subvert the system, if no lawyer is involved.
LikeLike
"I believe they did once for a woman who had defaulted on her student loans. Bust down the door, down on the floor, you own a lot of money for your college education!"I remember that story. it was the OIG's office of the Dept. of Ed. Working off recollection here, but I think it was the Patriot Act that exploded the number of OIG offices across DC. Seems like every agency has "special agents" complete with badges and guns.
LikeLike
Thanks Mark,I do think there is a better system in place here. It probably adds to the average interest rate paid but ultimately more just. Thanks for the clarification.
LikeLike
Next up, we'll have drones serving notice.
LikeLike
I was a mortgage collection agent for a brief period of time, when I lived in KC in the '80's.I had one case where the house had blown up, so of course the owner hadn't made payments. The mngmt didn't care; PAY UP. There was no compassion or understanding of any kind at all.On the other hand, I had a case where payments hadn't been made because they were installing a pool at their other house.Yes, that there is even a hint of debtor's prison bothers me a great deal. If I remember correctly, going to prison for nonpayment of debt was a federal violation here, though it was the status quo in England. It was one of the reasons for the Revolution, an example of the unfairness that we rebelled against.In the 90's, I had signed up for ATT phone service. They didn't show. I rescheduled. They still didn't show. I told ATT to forget about it, I was going elsewhere. They still tried to charge me for installation/cancellation, and I told them to go pound rocks. A year after the debt was retired, a collection company called. At first, I didn't recall what the heck they were talking about, and told them they had better get their facts straight if they called me again, and I would escalate. After I remembered what it was about, I still didn't let on.Turns out, many debt collectors buy old and outdated debt, because the percentages of collecting more than cover the cost. People just pay, and don't realize that by even acknowledging the call their credit rating just got reset. Doesn't matter if it is legit or not, or if it was no longer on the books.Oh, in case no one here has even been a debt collector, beware: there are a few techniques that they will use to collect. One of them is the 'silent treatment'. Say what you have to say, then shut up. The debtor will eventually give you all of the ammunition you need to collect the debt or sue them.Also, if you do send in a payment, that is less than agreed upon, if the collection agent deposits it, you don't ever have to pay more than that amount, regardless of what they say or threaten you with.
LikeLike