Different parts of the country do things differently…so when I stumbled upon an article that detailed ‘outrageous’ behavior by government officials, I forced myself to calm down and learn more. Although one aspect of this situation does sort of jump up and punch you right in the eye, since when did taxpayer funded services become collection agencies? Which is to ask, why should YOU foot the tab so corporate predators can collect, WITHOUT RE-IMBURSING YOU?
What am I ‘babbling about’ this time? read it an weep good citizen, the corporate police state is here!
[I refer you to yesterday’s post for ‘how’ corporate USA pulled this off…]
In jail for being in debt
You committed no crime, but an officer is knocking on your door. More Minnesotans are surprised to find themselves being locked up over debts.
By CHRIS SERRES and GLENN HOWATT , Star Tribune staff writers
Last update: June 9, 2010 - 7:58 AM
As a sheriff's deputy dumped the contents of Joy Uhlmeyer's purse into a sealed bag, she begged to know why she had just been arrested while driving home to Richfield after an Easter visit with her elderly mother.
No one had an answer. Uhlmeyer spent a sleepless night in a frigid Anoka County holding cell, her hands tucked under her armpits for warmth. Then, handcuffed in a squad car, she was taken to downtown Minneapolis for booking. Finally, after 16 hours in limbo, jail officials fingerprinted Uhlmeyer and explained her offense -- missing a court hearing over an unpaid debt. "They have no right to do this to me," said the 57-year-old patient care advocate, her voice as soft as a whisper. "Not for a stupid credit card."
It's not a crime to owe money, and debtors' prisons were abolished in the United States in the 19th century. But people are routinely being thrown in jail for failing to pay debts. In Minnesota, which has some of the most creditor-friendly laws in the country, the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009, a Star Tribune analysis of state court data has found. [Most (arrests) are not for ‘big money’ either, so this is ‘heavy-handedness’ plain and simple.]
Not every warrant results in an arrest, but in Minnesota many debtors spend up to 48 hours in cells with criminals. Consumer attorneys say such arrests are increasing in many states, including Arkansas, Arizona and Washington, driven by a bad economy, high consumer debt and a growing industry that buys bad debts and employs every means available to collect. [This is just more ‘wringing the consumer dry’, the retailer who sells the debt to these phirannas, ‘charges it off’ as ‘uncollectable’ from their income at ‘face value’, then they ‘sell’ the debt for fifty cents on the dollar (probably less these days) so between the tax savings and what the sharks fork over, they end up more or less ‘whole’. You on the other hand, will find yourself in jail because these ‘monkeys’ don’t screw around.]
Whether a debtor is locked up depends largely on where the person lives, because enforcement is inconsistent from state to state, and even county to county. [So, just because you haven’t been locked up (yet) doesn’t mean it isn’t going to happen…]
In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January, a judge sentenced a Kenney, Ill., man "to indefinite incarceration" until he came up with $300 toward a lumber yard debt. [Which begs a different question…how are you supposed to ‘earn’ the money to repay the debt if you’re locked up? Jackass doesn’t care where the money comes from so long as you get it…leaving most people ‘susceptible’ to predatory lenders who charge…er, outrageous interest rates, which solves what, precisely? You couldn’t pay in the first damn place! Adding more debt only makes matters worse!]
"The law enforcement system has unwittingly become a tool of the debt collectors," said Michael Kinkley, an attorney in Spokane, Wash., who has represented arrested debtors. "The debt collectors are abusing the system and intimidating people, and law enforcement is going along with it."
How often are debtors arrested across the country? No one can say. No national statistics are kept, and the practice is largely unnoticed outside legal circles. "My suspicion is the debt collection industry does not want the world to know these arrests are happening, because the practice would be widely condemned," said Robert Hobbs, deputy director of the National Consumer Law Center in Boston. [Interesting ‘source’…and, as a ‘Bostonian’, I am unaware of anyone being jailed in connection with the collection of a debt…in this neck of the woods anyway…]
Debt collectors defend the practice, saying phone calls, letters and legal actions aren't always enough to get people to pay. [This is a bogus argument because the ‘debt’ has already been ‘charged off’ before it was ‘sold’…the ‘buyer’ of the debt is hoping to collect a 50% plus ‘premium’ for their ‘trouble’. This is a ‘fuck you’ to the underpaid, cash strapped consumer.]
"Admittedly, it's a harsh sanction," said Steven Rosso, a partner in the Como Law Firm of St. Paul, which does collections work. "But sometimes, it's the only sanction we have." [Bozo isn’t being honest here, is he? Option one would be not to buy charged off debt in the first place, wouldn’t it?]
Taxpayers foot the bill for arresting and jailing debtors. In many cases, Minnesota judges set bail at the amount owed. [Headline caught my eye, I am quite (pleasantly) surprised to see this point made in print! Makes you wonder what the hell is wrong with the NY Times?]
In Minnesota, judges have issued arrest warrants for people who owe as little as $85 -- less than half the cost of housing an inmate overnight. Debtors targeted for arrest owed a median of $3,512 in 2009, up from $2,201 five years ago. [This still doesn’t answer the question of ‘who’ is footing the tab for this brand of ‘heavy-handedness’…but it’s sure looking like it falls on you! If the fuckers had to absorb the cost it wouldn’t be happening nearly as often! (And it shouldn’t be happening at all. We aren’t talking ‘bad people’ here, were looking at a ‘bad system’.)]
Those jailed for debts may be the least able to pay.
"It's just one more blow for people who are already struggling," said Beverly Yang, a Land of Lincoln Legal Assistance Foundation staff attorney who has represented three Illinois debtors arrested in the past two months. "They don't like being in court. They don't have cars. And if they had money to pay these collectors, they would."
The collection machine
The laws allowing for the arrest of someone for an unpaid debt are not new.
What is new is the rise of well-funded, aggressive and centralized collection firms, in many cases run by attorneys, that buy up unpaid debt and use the courts to collect. [‘The laws are there, use them’ is these people’s ‘argument/justification’; which is a pretty fucking bizarre display of lack of judgement considering how both the government and the banking sector have made such a mockery of ‘justice’! People being jailed for a few hundred dollars while bankers walk free after bilking the nation for trillions! Not the signal I’d want to be sending when the public already ‘suspects’ globalization wasn’t all it was cracked up to be…]
Three debt buyers -- Unifund CCR Partners, Portfolio Recovery Associates Inc. and Debt Equities LLC -- accounted for 15 percent of all debt-related arrest warrants issued in Minnesota since 2005, court data show. The debt buyers also file tens of thousands of other collection actions in the state, seeking court orders to make people pay.
The debts -- often five or six years old -- are purchased from companies like cellphone providers and credit card issuers, and cost a few cents on the dollar. Using automated dialing equipment and teams of lawyers, the debt-buyer firms try to collect the debt, plus interest and fees. A firm aims to collect at least twice what it paid for the debt to cover costs. Anything beyond that is profit. [Understand, the original creditor has already ‘charged off’ 100% of the debt against income, that is why lenders aren’t particularly ‘careful’ about extending credit. They ‘win’ if you pay and they ‘win’ if you don’t pay. And we haven’t even taken ‘margins’ into consideration! For some products, margins are 500 to 700% The ‘price’ you are charged often has little to do with how much an item ‘cost’ to produce!]
Portfolio Recovery Associates of Norfolk, Va., a publicly traded debt buyer with the biggest profits and market capitalization, earned $44 million last year on $281 million in revenue -- a 16 percent net margin. Encore Capital Group, another large debt buyer based in San Diego, had a margin last year of 10 percent. By comparison, Wal-Mart's profit margin was 3.5 percent. [Don’t be mis-lead, Wally Mart may be ‘averaging’ three percent but many of the products they sell have considerably higher ‘margins’…they simply don’t sell a lot of ‘high margin’ items. Which is not to be confused with not ‘carrying’ such items…]
Todd Lansky, chief operating officer at Resurgence Financial LLC, a Northbrook, Ill.-based debt buyer, said firms like his operate within the law, which says people who ignore court orders can be arrested for contempt. By the time a warrant is issued, a debtor may have been contacted up to 12 times, he said.
"This is a last-ditch effort to say, 'Look, just show up in court,'" he said. [Nice ‘dodge’ Mr. Lansky. Claim that you’ve exhausted your ‘legal remedies’ while ‘side-stepping’ the legality of buying debt that has already been ‘charged off’…and making the public pay to collect it!]
Go to court -- or jail
At 9:30 a.m. on a recent weekday morning, about a dozen people stood in line at the Hennepin County Government Center in Minneapolis.
Nearly all of them had received court judgments for not paying a delinquent debt. One by one, they stepped forward to fill out a two-page financial disclosure form that gives creditors the information they need to garnish money from their paychecks or bank accounts.
This process happens several times a week in Hennepin County. Those who fail to appear can be held in contempt and an arrest warrant is issued if a collector seeks one. Arrested debtors aren't officially charged with a crime, but their cases are heard in the same courtroom as drug users.
Greg Williams, who is unemployed and living on state benefits, said he made the trip downtown on the advice of his girlfriend who knew someone who had been arrested for missing such a hearing.
"I was surprised that the police would waste time on my petty debts," said Williams, 45, of Minneapolis, who had a $5,773 judgment from a credit card debt. "Don't they have real criminals to catch?"
Few debtors realize they can land in jail simply for ignoring debt-collection legal matters. Debtors also may not recognize the names of companies seeking to collect old debts. Some people are contacted by three or four firms as delinquent debts are bought and sold multiple times after the original creditor writes off the account.
"They may think it's a mistake. They may think it's a scam. They may not realize how important it is to respond," said Mary Spector, a law professor at Southern Methodist University's Dedman School of Law in Dallas.
A year ago, Legal Aid attorneys proposed a change in state law that would have required law enforcement officials to let debtors fill out financial disclosure forms when they are apprehended rather than book them into jail. No legislator introduced the measure.
Joy Uhlmeyer, who was arrested on her way home from spending Easter with her mother, said she defaulted on a $6,200 Chase credit card after a costly divorce in 2006. The firm seeking payment was Resurgence Financial, the Illinois debt buyer. Uhlmeyer said she didn't recognize the name and ignored the notices.
Uhlmeyer walked free after her nephew posted $2,500 bail. It took another $187 to retrieve her car from the city impound lot. Her 86-year-old mother later asked why she didn't call home after leaving Duluth. Not wanting to tell the truth, Uhlmeyer said her car broke down and her cell phone died.
"The really maddening part of the whole experience was the complete lack of information," she said. "I kept thinking, 'If there was a warrant out for my arrest, then why in the world wasn't I told about it?'"
Jailed for $250
Greg Williams, who is unemployed and living on state benefits, said he made the trip downtown on the advice of his girlfriend who knew someone who had been arrested for missing such a hearing.
"I was surprised that the police would waste time on my petty debts," said Williams, 45, of Minneapolis, who had a $5,773 judgment from a credit card debt. "Don't they have real criminals to catch?"
Few debtors realize they can land in jail simply for ignoring debt-collection legal matters. Debtors also may not recognize the names of companies seeking to collect old debts. Some people are contacted by three or four firms as delinquent debts are bought and sold multiple times after the original creditor writes off the account.
"They may think it's a mistake. They may think it's a scam. They may not realize how important it is to respond," said Mary Spector, a law professor at Southern Methodist University's Dedman School of Law in Dallas.
A year ago, Legal Aid attorneys proposed a change in state law that would have required law enforcement officials to let debtors fill out financial disclosure forms when they are apprehended rather than book them into jail. No legislator introduced the measure.
Joy Uhlmeyer, who was arrested on her way home from spending Easter with her mother, said she defaulted on a $6,200 Chase credit card after a costly divorce in 2006. The firm seeking payment was Resurgence Financial, the Illinois debt buyer. Uhlmeyer said she didn't recognize the name and ignored the notices.
Uhlmeyer walked free after her nephew posted $2,500 bail. It took another $187 to retrieve her car from the city impound lot. Her 86-year-old mother later asked why she didn't call home after leaving Duluth. Not wanting to tell the truth, Uhlmeyer said her car broke down and her cell phone died.
"The really maddening part of the whole experience was the complete lack of information," she said. "I kept thinking, 'If there was a warrant out for my arrest, then why in the world wasn't I told about it?'"
Jailed for $250
One afternoon last spring, Deborah Poplawski, 38, of Minneapolis was digging in her purse for coins to feed a downtown parking meter when she saw the flashing lights of a Minneapolis police squad car behind her. Poplawski, a restaurant cook, assumed she had parked illegally. Instead, she was headed to jail over a $250 credit card debt.
Less than a month earlier, she learned by chance from an employment counselor that she had an outstanding warrant. Debt Equities, a Golden Valley debt buyer, had sued her, but she says nobody served her with court documents. Thanks to interest and fees, Poplawski was now on the hook for $1,138.
Though she knew of the warrant and unpaid debt, "I wasn't equating the warrant with going to jail, because there wasn't criminal activity associated with it," she said. "I just thought it was a civil thing."
She spent nearly 25 hours at the Hennepin County jail.
A year later, she still gets angry recounting the experience. A male inmate groped her behind in a crowded elevator, she said. Poplawski also was ordered to change into the standard jail uniform -- gray-white underwear and orange pants, shirt and socks -- in a cubicle the size of a telephone booth. She slept in a room with 12 to 16 women and a toilet with no privacy. One woman offered her drugs, she said.
The next day, Poplawski appeared before a Hennepin County district judge. He told her to fill out the form listing her assets and bank account, and released her. Several weeks later, Debt Equities used this information to seize funds from her bank account. The firm didn't return repeated calls seeking a comment.
"We hear every day about how there's no money for public services," Poplawski said. "But it seems like the collectors have found a way to get the police to do their work."
Threat depends on location
A lot depends on where a debtor lives or is arrested, as Jamie Rodriguez, 41, a bartender from Brooklyn Park, discovered two years ago.
Deputies showed up at his house one evening while he was playing with his 5-year-old daughter, Nicole. They live in Hennepin County, where the Sheriff's Office has enough staff to seek out people with warrants for civil violations.
If Rodriquez lived in neighboring Wright County, he could have simply handed the officers a check or cash for the amount owed. If he lived in Dakota County, it's likely no deputy would have shown up because the Sheriff's Office there says it lacks the staff to pursue civil debt cases.
Knowing that his daughter and wife were watching from the window, Rodriguez politely asked the deputies to drive him around the block, out of sight of his family, before they handcuffed him. The deputies agreed.
"No little girl should have to see her daddy arrested," said Rodriguez, who spent a night in jail.
"If you talk to 15 different counties, you'll find 15 different approaches to handling civil warrants," said Sgt. Robert Shingledecker of the Dakota County Sheriff's Office. "Everything is based on manpower."
Local police also can enforce debt-related warrants, but small towns and some suburbs often don't have enough officers.
The Star Tribune's comparison of warrant and booking data suggests that at least 1 in 6 Minnesota debtors at risk for arrest actually lands in jail, typically for eight hours. The exact number of such arrests isn't known because the government doesn't consistently track what happens to debtor warrants.
"There are no standards here," said Gail Hillebrand, a senior attorney with the Consumers Union in San Francisco. "A borrower who lives on one side of the river can be arrested while another one goes free. It breeds disrespect for the law."
Haekyung Nielsen, 27, of Bloomington, said police showed up at her house on a civil warrant two weeks after she gave birth through Caesarean section. A debt buyer had sent her court papers for an old credit-card debt while she was in the hospital; Nielsen said she did not have time to respond.
Her baby boy, Tyler, lay in the crib as she begged the officer not to take her away.
"Thank God, the police had mercy and left me and my baby alone," said Nielsen, who later paid the debt. "But to send someone to arrest me two weeks after a massive surgery that takes most women eight weeks to recover from was just unbelievable."
The second surprise
Many debtors, like Robert Vee, 36, of Brooklyn Park, get a second surprise after being arrested -- their bail is exactly the amount of money owed.
Hennepin County automatically sets bail at the judgment amount or $2,500, whichever is less. This policy was adopted four years ago in response to the high volume of debtor default cases, say court officials.
Some judges say the practice distorts the purpose of bail, which is to make sure people show up in court.
"It's certainly an efficient way to collect debts, but it's also highly distasteful," said Hennepin County District Judge Jack Nordby. "The amount of bail should have nothing to do with the amount of the debt."
Judge Robert Blaeser, chief of the county court's civil division, said linking bail to debt streamlines the process because judges needn't spend time setting bail.
"It's arbitrary," he conceded. "The bigger question is: Should you be allowed to get an order from a court for someone to be arrested because they owe money? You've got to remember there are people who have the money but just won't pay a single penny."
If friends or family post a debtor's bail, they can expect to kiss the money goodbye, because it often ends up with creditors, who routinely ask judges for the bail payment.
Vee, a highway construction worker, was arrested one afternoon in February while driving his teenage daughter from school to their home in Brooklyn Park. As he was being cuffed, Vee said his daughter, who has severe asthma, started hyperventilating from the stress.
"All I kept thinking about was whether she was all right and if she was using her [asthma] inhaler," he said.
From the Hennepin County jail, he made a collect call to his landlord, who promised to bring the bail. It was $1,875.06, the exact amount of a credit card debt.
Later, Vee was reunited with his distraught daughter at home. "We hugged for a long time, and she was bawling her eyes out," he said.
He still has unpaid medical and credit card bills and owes about $40,000 on an old second mortgage. The sight of a squad car in his rearview mirror is all it takes to set off a fresh wave of anxiety.
"The question always crosses my mind: 'Are the cops going to arrest me again?'" he said. "So long as I've got unpaid bills, the threat is there."
In the vast scheme of things good citizen it is extremely doubtful that ANY of these ‘debts’ are ‘collectable’ never mind ‘legal’.
What isn’t nearly as doubtful is the moral issue here of ‘overcharging’ a customer for that which is free from nature. This is where ‘debt’ is born, it is born of the act of putting an artificially high price on an object and then ‘offering’ the buyer to ‘carry’ the largely inflated cost (for a considerable fee.)
What the market will bear is not necessarily what the market can pay…as the current economic crisis has taught us. In fact, if we were to adhere to a strict ‘market model’, prices would fall considerably to match a much smaller pool of buyers...which would eventually dwindle to zero.
Which brings us to a second, larger issue. Since ‘rarity’ drives price, extreme scarcity eliminates all would be buyers…leaving you where? Is the object ‘priceless’ or is it ‘worthless’?
Thanks for letting me inside your head,
Gegner
No comments:
Post a Comment