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  1. #1
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    http://www.startribune.com/local/956...tml?page=1&c=y

    In jail for being in debt



    Star Tribune



    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.

    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.

    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.

    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.

    "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
    Last edited by Parker2112; 11-18-2010 at 05:47 PM.

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    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 su ion
    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.

    Debt collectors defend the practice, saying
    phone calls, letters and legal actions aren't
    always enough to get people to pay.

    "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."

    Taxpayers foot the bill for arresting and
    jailing debtors. In many cases, Minnesota
    judges set bail at the amount owed.

    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.

    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.

    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

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    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.

    Portfolio Recovery Associates of Norfolk, Va.,
    a publicly traded debt buyer with the biggest
    profits and market capitalization, earned $44 m
    illion 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.

    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.


    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

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    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 o
    ut 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 d
    idn'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 i
    nformation," 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

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    Equities, a Golden Valley debt buyer, had
    sued her, but she says nobody served her
    with court do ents. 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 f
    rom 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

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    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.

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    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."

    [email protected]1 • 612-673-4308
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    Americans are shocked that not paying back unsecured debt gets them in trouble. More news @11.

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    Believe. Parker2112's Avatar
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    we need to spend public tax dollars to enforce private debts for unscrupulous debt collectors? Really?

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    A neverending cycle Trainwreck2100's Avatar
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    Americans are shocked that not paying back unsecured debt gets them in trouble. More news @11.
    In this case when the creditors gave them the money they knew prison wasn't a recourse. The original creditors aren't even the plaintiffs its collection agencies that bought it for pennies. What's going on now is collection agencies are serving, many times improperly and getting judgements and the people not showing up and getting judgments against them.

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    Sure, it's unfair, arbitrary, and capricious. Welcome to American courts circa now.

    Again, people are shocked that they aren't able to craft their own payment-free loan without repercussions. Welcome to reality. Want the creditors/collectors/Mephistopheles off your ass? File for bankruptcy.

    And as for a problem with using public courts to address private breaches, what planet are you from?

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    Believe. Parker2112's Avatar
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    Sure, it's unfair, arbitrary, and capricious. Welcome to American courts circa now.

    Again, people are shocked that they aren't able to craft their own payment-free loan without repercussions. Welcome to reality. Want the creditors/collectors/Mephistopheles off your ass? File for bankruptcy.

    And as for a problem with using public courts to address private breaches, what planet are you from?
    Sure, litigation happens, and taxpayers bear part of it. But costs of incarceration are inexcusable.

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    Expecting to get out of paying back your debts without trouble because you didn't manage your money wisely and expecting to not show up to court without penalty are inexcusable.

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    And there exists a legal remedy for individuals who find themselves insolvent and illiquid.

    What's the problem?

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    Believe. Parker2112's Avatar
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    And there exists a legal remedy for individuals who find themselves insolvent and illiquid.

    What's the problem?
    Did you read the OP? when your dealing with these ball debt collection co's, there will always be problems with process. Op lists more than a couple.

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    Expecting to get out of paying back your debts without trouble because you didn't manage your money wisely and expecting to not show up to court without penalty are inexcusable.
    dont give me that bs. The govt does and prints more cash, corps do it and get bailed out, wall st does it and gets bailed out, then the rolls down hill and the little guy on the bottom has to eat it after he loses his job?

    that noise buddy.

    Capitalist system cuts two ways. make your money, take your lumps. But we dont need to jail debtors who havent been served properly, or had a chance to be heard.

    that noise too buddy.

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    The problem I see is that some of these people claim they received no notice that they were being sued by these debt collectors. If you're getting sued you should be notified and be able to challenge or defend yourself in court before any warrant is issued.

    If courts are issuing warrants before summons, then there's definitely a problem.

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    The problem I see is that some of these people claim they received no notice that they were being sued by these debt collectors. If you're getting sued you should be notified and be able to challenge or defend yourself in court before any warrant is issued.

    If courts are issuing warrants before summons, then there's definitely a problem.
    thats the biggest issue

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    Damn The Man Mr. Peabody's Avatar
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    And as for a problem with using public courts to address private breaches, what planet are you from?
    It's not the issue of using the courts to the alleged breach of contract. Like you allude to, litigants do that all of the time. But when they do it, they have to hire a lawyer, pay a filing fee, pay for a record, etc. These costs aren't shifted to the tax payers in the county. They are paid for by the person/en y attempting to recover on the breach.

    Using the county law enforcement agencies to enforce a private contract without the existence of a criminal violation is a waste of tax payer money. I don't want my tax dollars being spent to house someone in jail at a cost of $150/day to enforce an $80 debt owed to a collection agency.

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    Marcus, I am sure you are familiar with strategic default in the marketplace? It is actually considered GOOD for the marketplace to allow a corp to default if it means less expensive operations taking into account all new expense including damages.

    But the little guy gets tagged with this whole "moral" component? Sounds like creditors are in charge of writing society's std.s for acceptable behavior, no?

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    A neverending cycle Trainwreck2100's Avatar
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    The problem I see is that some of these people claim they received no notice that they were being sued by these debt collectors. If you're getting sued you should be notified and be able to challenge or defend yourself in court before any warrant is issued.

    If courts are issuing warrants before summons, then there's definitely a problem.

    Improper service is a huge issue with these CAs

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    dont give me that bs. The govt does and prints more cash, corps do it and get bailed out, wall st does it and gets bailed out, then the rolls down hill and the little guy on the bottom has to eat it after he loses his job?

    that noise buddy.

    Capitalist system cuts two ways. make your money, take your lumps. But we dont need to jail debtors who havent been served properly, or had a chance to be heard.

    that noise too buddy.

    So the complaint is that the little guy can't screw someone else over. Grand.

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    So the complaint is that the little guy can't screw someone else over. Grand.
    no. the bottom line is that capitalism is risky. No need to send folks to the pokey.

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    A neverending cycle Trainwreck2100's Avatar
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    So the complaint is that the little guy can't screw someone else over. Grand.
    no the original lender is already screwed over. The debt would have been charged off. Its a third party trying to screw over the guy who screwed over the lender.

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    The problem I see is that some of these people claim they received no notice that they were being sued by these debt collectors. If you're getting sued you should be notified and be able to challenge or defend yourself in court before any warrant is issued.

    If courts are issuing warrants before summons, then there's definitely a problem.
    Sure, there are problems rife throughout the system.

    Here's a solution: Don't borrow more than you can afford, and pay your debts when you can and you don't have to worry about dealing with some asshole debt collector. Had most of the delinquent debtors done that instead of expecting a free ride we'd have the few true hard luck cases left (ie medical bills).

    And the taxpayers wouldn't have to worry about the legal enforcement costs associated with someone who was irresponsible with their financial decisions.

    Turning every instance of actually being held responsible for your actions into some kind of persecution by an Inspector Javert is boorish, yet predictable in this country in 2010.

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