April 19, 2012
CHICAGO — Jailed for unpaid debts? It happened to breast cancer survivor Lisa Lindsay.
She got a $280 medical bill in error and was told she didn't have to pay it. But the bill was turned over to a collection agency, and eventually state troopers showed up at her home and took her to jail in handcuffs.
Debt collectors have become so aggressive in some parts of Illinois that they commonly use taxpayer-financed courts, sheriff's deputies and county jails to squeeze poor people who fall behind on small payments of $25 or $50 a month, according to supporters of the proposed legislative reforms. Lawmakers in Springfield are pushing to make it harder to jail poor people who miss court dates or are found in contempt of court as they struggle with unpaid debts — an aggressive practice that got worse, some say, during the recession.
Lindsay, a teaching assistant from Herrin in southern Illinois, ended up paying more than $600 because legal fees had been added to the original amount.
"I paid it in full so they couldn't do it to me again," Lindsay said.
The Illinois bill would require court appearance notices to be served to a debtor's home, rather than merely mailed. It would require arrest warrants to expire after a year, and it would return most bail money to the debtor, rather than allow it to be used to pay off the debt.
Disabled roofer Jack Hinton sat in jail until he could come up with $300 on a debt he owed a lumberyard.
According to a hearing transcript, a central Illinois judge listened to Hinton's story, noted he'd recently been paid after finishing a roofing job, and said: "Mr. Hinton, you had $1,000 in your pocket, you chose to spend it elsewhere in violation of the court order. That lands you in jail."
Hinton's wife took out a loan to buy his freedom. Her $300 went to the debt collector.
Michelle Gilliam, an unemployed Urbana resident, was picked up by sheriff's deputies and jailed twice for missing court dates as a debt collector pursued her in court for a decade, she and her attorney said. Gilliam got help from a nonprofit group offering free legal services and the court dismissed the case, essentially forgiving her debt on the grounds she was too poor to pay.
The problem has surfaced in other states, but there is no model legislation. Advocates in Minnesota unsuccessfully tried to pass a bill that would have allowed debtors to fill out an affidavit stating their income and assets when the sheriff arrived at the door to execute a warrant, according to Illinois Attorney General Lisa Madigan's office.
Madigan, a supporter of the bill, said informal traditions in some Illinois courtrooms "have allowed these abuses to occur." The recession heightened the problem, she said.
"More people are unemployed, more people are struggling financially and more creditors are trying to get their debt paid," Madigan said.
The bill, which has passed the House, is supported even by groups representing debt collectors and their attorneys, who agree with Madigan that some judges and attorneys have gone too far. Judges will retain the discretion to issue arrest warrants and to jail debtors for contempt.
Lawsuits against debtors are a last resort, said Eric Mock of the Illinois Collectors Association. "A consumer that has been arrested or jailed can't pay a debt. We want to work with consumers to resolve issues," he said.
Madigan learned of the problem last year. Her office was getting reports of impoverished people pursued through the courts for back rent, medical debt and payday loans, she said. One woman who owed money on a vacuum cleaner spent weeks in jail before someone lined her up with free legal services.
"We're using public resources to collect private debts," Madigan said. "At what point do you say it's illegal?"
Lenders can be part of the problem. In 2010, the Illinois agency that licenses lending companies went after a Carbondale storefront lender for exploiting the court system to get its customers incarcerated. The Illinois Department of Financial and Professional Regulation revoked the company's license, later reaching a settlement that restored it.
In court, debtors rarely have an attorney, while creditors hire experienced legal representation.
That was the case for Hinton, a 57-year-old from Kenney in central Illinois who became disabled after falling off a roof. Hinton wasn't working much since he'd hurt his neck and back. He was behind on his court-ordered payment plan on an old debt. He recently had wrapped up a roofing job, but he spent the $1,000 he received to pay other bills.
Without his own attorney, Hinton represented himself. During a quick court hearing, a lawyer representing the creditor established that the roofer briefly had $1,000. That was enough to send him to jail.
"I got no sympathy, whatsoever," Hinton said.
Illinois law allows some sources of income, such as Social Security, to remain exempt from debt collection. Poor people with only exempt income and no property are being pursued by certain attorneys, said John Roska, an attorney for Land of Lincoln Legal Assistance Foundation who represented Gilliam in court.
"She doesn't have any employment income and no property," Roska said of Gilliam. "She is a turnip. You can't get blood out of a turnip. That's as protected as she can get."
CHICAGO — Jailed for unpaid debts? It happened to breast cancer survivor Lisa Lindsay.
She got a $280 medical bill in error and was told she didn't have to pay it. But the bill was turned over to a collection agency, and eventually state troopers showed up at her home and took her to jail in handcuffs.
Debt collectors have become so aggressive in some parts of Illinois that they commonly use taxpayer-financed courts, sheriff's deputies and county jails to squeeze poor people who fall behind on small payments of $25 or $50 a month, according to supporters of the proposed legislative reforms. Lawmakers in Springfield are pushing to make it harder to jail poor people who miss court dates or are found in contempt of court as they struggle with unpaid debts — an aggressive practice that got worse, some say, during the recession.
Lindsay, a teaching assistant from Herrin in southern Illinois, ended up paying more than $600 because legal fees had been added to the original amount.
"I paid it in full so they couldn't do it to me again," Lindsay said.
The Illinois bill would require court appearance notices to be served to a debtor's home, rather than merely mailed. It would require arrest warrants to expire after a year, and it would return most bail money to the debtor, rather than allow it to be used to pay off the debt.
Disabled roofer Jack Hinton sat in jail until he could come up with $300 on a debt he owed a lumberyard.
According to a hearing transcript, a central Illinois judge listened to Hinton's story, noted he'd recently been paid after finishing a roofing job, and said: "Mr. Hinton, you had $1,000 in your pocket, you chose to spend it elsewhere in violation of the court order. That lands you in jail."
Hinton's wife took out a loan to buy his freedom. Her $300 went to the debt collector.
Michelle Gilliam, an unemployed Urbana resident, was picked up by sheriff's deputies and jailed twice for missing court dates as a debt collector pursued her in court for a decade, she and her attorney said. Gilliam got help from a nonprofit group offering free legal services and the court dismissed the case, essentially forgiving her debt on the grounds she was too poor to pay.
The problem has surfaced in other states, but there is no model legislation. Advocates in Minnesota unsuccessfully tried to pass a bill that would have allowed debtors to fill out an affidavit stating their income and assets when the sheriff arrived at the door to execute a warrant, according to Illinois Attorney General Lisa Madigan's office.
Madigan, a supporter of the bill, said informal traditions in some Illinois courtrooms "have allowed these abuses to occur." The recession heightened the problem, she said.
"More people are unemployed, more people are struggling financially and more creditors are trying to get their debt paid," Madigan said.
The bill, which has passed the House, is supported even by groups representing debt collectors and their attorneys, who agree with Madigan that some judges and attorneys have gone too far. Judges will retain the discretion to issue arrest warrants and to jail debtors for contempt.
Lawsuits against debtors are a last resort, said Eric Mock of the Illinois Collectors Association. "A consumer that has been arrested or jailed can't pay a debt. We want to work with consumers to resolve issues," he said.
Madigan learned of the problem last year. Her office was getting reports of impoverished people pursued through the courts for back rent, medical debt and payday loans, she said. One woman who owed money on a vacuum cleaner spent weeks in jail before someone lined her up with free legal services.
"We're using public resources to collect private debts," Madigan said. "At what point do you say it's illegal?"
Lenders can be part of the problem. In 2010, the Illinois agency that licenses lending companies went after a Carbondale storefront lender for exploiting the court system to get its customers incarcerated. The Illinois Department of Financial and Professional Regulation revoked the company's license, later reaching a settlement that restored it.
In court, debtors rarely have an attorney, while creditors hire experienced legal representation.
That was the case for Hinton, a 57-year-old from Kenney in central Illinois who became disabled after falling off a roof. Hinton wasn't working much since he'd hurt his neck and back. He was behind on his court-ordered payment plan on an old debt. He recently had wrapped up a roofing job, but he spent the $1,000 he received to pay other bills.
Without his own attorney, Hinton represented himself. During a quick court hearing, a lawyer representing the creditor established that the roofer briefly had $1,000. That was enough to send him to jail.
"I got no sympathy, whatsoever," Hinton said.
Illinois law allows some sources of income, such as Social Security, to remain exempt from debt collection. Poor people with only exempt income and no property are being pursued by certain attorneys, said John Roska, an attorney for Land of Lincoln Legal Assistance Foundation who represented Gilliam in court.
"She doesn't have any employment income and no property," Roska said of Gilliam. "She is a turnip. You can't get blood out of a turnip. That's as protected as she can get."
341 Meeting: September 2010
November 2010
Comment