Monday, December 12, 2011

NPR Reports that Debtors Prisons Are Alive and Well - Credit Slips

NPR Reports that Debtors Prisons Are Alive and Well - Credit Slips
NPR tells the story of Illinois debtor Robin Sanders in Illinois, who was stopped by police for a loud muffler but taken directly to jail on an arrest warrant for failure to appear at a hearing on an unpaid medical bill, all in a lawsuit she was unaware of. Similar stories have been reported in Indiana, Tennessee and Washington, and all involve selling debt to a collection agency, that then files a lawsuit against the debtor requiring a court appearance. A notice to appear in court is supposed to be given to the debtor. If they fail to show up, a warrant is issued for their arrest. According to the story, despite that debtor’s prisons were outlawed early in our country’s history, one-third of all states still allow people who have not paid bills to be jailed.
The Republicans must love this. We are rocketing forward into the 18th century.


Anonymous said...

The libertarian Reason magazine reported this a year ago.

"The Return of Debtors Prison"

One reader commented that

I imagine debtors prison is where the right-leaning libertarian's committment to liberty meets and gets raped by their stronger committment to "responsibility."

Reading the other comments to that story, (and others about debtors prison), it's amazing how clueless a lot of people are about the real-world nature of "contracts" and "debts". Those words don't mean what most people think they mean.

I hope the Tea Partiers enjoy getting paid in scrip, because in Libertarian Utopia, they're going to need it to purchase essential goods from the company store.

Anonymous said...
"Debt Collectors Ask to Be Paid a Little Respect"
June 13, 2011, p. A1
"Third-party debt collectors are typically hired by a store, cellphone company or a bank, to collect a debt that has become delinquent. Often, huge portfolios of delinquent debt are sold to a debt buyer for pennies on the dollar; the debt buyer, in turn, may hire a collection agency, or a law firm specializing in debt collection."

One of the readers had comment that is so brilliant that it ought to be a law:

"Why can't the primary debt holder, instead of selling the debt to a collection agency, allow the debtor the chance to purchase his/her debt at the same price and terms the collection agency is bidding?"
-Hank. June 13, 2011. 9:40 AM. Comment # 37.

Why not indeed, if the original creditor is already willing to sell the debt for "pennies on the dollar" and write-off the losses?

Anonymous said...

Time to go back and re-read , where Michael Konczal describes the Cato Institute's views on so-called free-market capitalism:

"I like this form of libertarianism, where policy is simply the things that defend the power and hierarchy of creditors, the rich and the elite, much better than the normal 'gee whiz markets are cool' kind. There’s almost a Nietzschean zeal for the wonk world to first and foremost accept creditors as a master class to whom all policy bends."

Maybe libertarians look forward to the future as depicted in the novel "Emily's Debt," when:

In the very near future, where failing to pay student loan debts is a crime, Emily is in big trouble. She has a large student loan and no job. She’s heard, of course, that student loan debtors weren’t sent to jail. Instead, they’re rented by the government to corporations and businesses so that their work can help pay off their student debts. But renting becomes purchasing, and crafty lawyers and greedy companies turn student debt bondage into slavery with hardly anyone paying attention.

because they're naive enough to believe they won't be contracted into slavery, just the worthless delinquents who deserve to be.

Anonymous said...

FYI: Here's the link to the original NPR story, which is not included

Unpaid Bills Land Some Debtors Behind Bars
by Susie An
December 12, 2011 from WBEZ

Anonymous said...

Megan McArdle, who used to write under the nom de plume Jane Galt before becoming a business and economics writer for The Atlantic, wrote about "A New Breed of Debt Collectors" * (July 13, 2010).

According to this Ayn Randian,

I don't know what to do about these vermin; the law's already pretty stiff (at least $1,000 for each violation). I'm not against collecting debts per se; people should pay what they owe, and if there weren't a secondary market in debt, it would be a lot harder to get credit, especially from places like hospitals.

because silly libertarians believe that corporations that collect thousands, hundreds of thousand, or even millions of dollars per year are going to be deterred by the possibility that somebody is going to go through the time and expense to sue them for up to $1,000 (total, not "per-violation" as Ms. Galt mistakenly claims). It is still profitable to break the law because the rewards are great, the risk is low, and in the rare event a creditor is penalized the penalties are negligible. Ms. Galt is definitely one of those Nietzschean wonks who "accept creditors as a master class to whom all policy bends."

Earlier this year, a pro-HOA activist judge gutted the FDCPA, making it for all practical purposes un-enforcable. But if there's one thing the Right Wing hates more than activist judges and rapacious attorneys, it's consumer protection laws.

* When the article was re-printed by "Business Insider," it was titled "Meet The New, Scarier Breed of Debt Collector".