Rights & Liberties

Philly Courts Rein in Debt-Collection Campaign

The First Judicial District of Pennsylvania, the city's court system, initiated a campaign in 2011 to squeeze the city's poorest residents for old, uncertain and possibly erroneous debts, hiring sometimes unsavory contractors who went so far as to threaten people with arrest.

On Sept. 30, the courts quietly shut down much of the program, ceasing collection of bail judgments issued before March 3, 2010, and transferring the responsibility of collecting more recent bail debts to the city's Department of Revenue.

The only announcement of the much-criticized program's death was a little-noticed post to the courts' website, stating an order from Administrative Judge John W. Herron was “granting the request of the City of Philadelphia.”

“I think it's terrific” says Sharon Dietrich, Community Legal Services' litigation director, because “it recognizes that these judgments were basically uncollectable.” According to the courts, 70 percent of defendants are unemployed, “and they were trying to collect many thousands of dollars of bail from them. So the math just doesn't add up.”

The courts initiated the collection effort in the wake of the Inquirer's high-profile 2009 “Justice: Delayed, Dismissed, Denied” investigation, which found that the now-defunct Clerk of Quarter Sessions had failed to collect an estimated $1.5 billion in forfeited bail, fees, fines and restitution dating back to the early 1970s. The office of Clerk of Quarter Sessions, which managed collections and was widely criticized for incompetent record-keeping, was abolished in 2010.

Yet the First Judicial District continued to rely on that office's records to target Philadelphians for collection, many of whom believed they had left their involvement with the legal system far behind. Little in additional funds was collected, in part because many of those targeted for collection were low-income and could only afford to submit small monthly payment plans.

Others say they did not actually owe the debts. Such alleged debtors faced the Kafka-esque prospect of proving that they had made a payment decades before, or showing that they had been incarcerated at the time that they had failed to appear in court — records that for some older cases simply did not exist, as WHYY reported.

The City of Philadelphia did not respond to requests for comment to explain the move, and neither did the FJD, which will continue, it seems, to collect other non-bail court debts.

In 2012, mayoral spokesperson Mark McDonald told City Paper that “the city is working with the First Judicial District to collect millions of dollars of legacy bail judgments” and that “the First Judicial District is employing the appropriate tools under the law to achieve that goal.”

City officials seem, for reasons that have not yet been articulated, to have changed their minds. What's certain is that the move follows years of criticism from CLS, which struggled to represent a deluge of poor people suddenly facing questionable debt collections — the sorts of people who were profiled in 2012 and 2013 City Paper articles describing the collection efforts.

One former debtor, who asked not to be named, had told City Paper that she received threatening phone calls in September 2012, even though she had been on a $35-per-month payment plan with the courts for seven years: “They'll take my house if I own a house; if I own a car, they'll take it.”

The woman, who has been off probation for 15 years, said that the threats only stopped once she contacted a lawyer at CLS.

The FJD hired 10 law firms and two collection firms to collect debts. Among those law firms was a politically-connected firm that was itself in debt to the city.

St. Hill & Associates, which later changed its name to Convergent Legal Group LLC, had received $8.3 million in city-backed loans and loan guarantees from the Philadelphia Industrial Development Corp. (PIDC) during the Ed Rendell and John Street administrations — and didn't pay most of it back after the company got into financial trouble. St. Hill's contract with the courts was terminated in February 2013, soon after City Paper began making inquiries.

The FJD, facing criticism, lurched from one collection method to another. In 2012, it listed new “Payment Plan Criminal Contempt Hearings” on its calendar — hearings which could expose delinquent debtors to potential jail time. But contacted by City Paper, the courts denied that any such hearings had taken place, and refused to explain why they had been listed on their calender.

In November 2012, they suspended third-party collection efforts, but refused to explain exactly why, or when they would be restarted.

CLS also faulted the courts for generally attempting to collect the full amount of bail that a defendant forfeited by failing to appear in court, even though court rules generally mandate 30 to 90 percent discounts, depending on when a defendant ultimately appears. CLS estimated that this oversight led the courts to overestimate the amount of forfeited bail owed by $350 million.

What's worse, CLS's Dietrich says that alleged debtors would not have known that they did not owe the full amount unless they had legal representation — and that CLS was only able to represent a small portion of those targeted for collection.

As for those currently on monthly payment plans for old bail debts, it seems that they will not have to continue to pay.

“Realistically, these people tend to making payments of between 5 and 35 dollars” a month,“ says Dietrich. ”It's not going to cost the courts a whole lot of money. When you're living on SSI, that's about what you can pay, if anything. That's why these debts were basically uncollectable. Blood from a stone.“

This post originally appeared at Philadelphia City Paper and is posted here with permission.

About the reporter

Daniel Denvir

Daniel Denvir

Daniel Denvir is a journalism and research fellow at Harvard Law School's Fair Punishment Project.

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