Citizen Wealth Financial Justice WalMart

benefit+agency+signNew Orleans Part of the digital divide crushing lower income families turns out to be the slick way that law firms and others have been exploiting the court system to harass people with credit problems and then pile on more debt, fees, and collection charges by automating the process.  In the same way that bottom feeding predator companies have contracted to contest all unemployment claims for mass employers like Wal-Mart, Target, and others, some debt-beat law firms have organized in the same way to harass debtors.  The Times had an article the other day on one firm, Cohen & Slamowitz, which filed 80,000 cases in 2008 (which was down from 83000+ in 2006 and almost 88000 in 2007!).  There was no comment from the firm, they didn’t have time to say anything!

These debt-beats buy the debts at 5 cents on the dollar, and then assume that they can get more than their nickel back by hauling someone with a bill into court, where they usually don’t show and would virtually never have a lawyer.  As we discussed before, frequently that allows the collector to add on collection fees that may double the debt and interest charges on the whole shebang that can run over 25% of the debt.  If they are successful in getting a judgment to garnishee the wages, then they can bleed the poor working stiff for years, while the debt remains virtually unchanged.  This is the modern debtor’s prison:  soft walls, but no escape!

These computerized court cases file on little more than a name, social security number, and allegation of the debt owed with little or no detail on charges, fees, interest, or anything that might explain what and wherefore.  Tragically that is often more than enough to get a judgment, especially when there’s a no-show by the alleged debtor at the hearing.

North Carolina has passed something requiring more information.  A judge here and there has dismissed a claim because there was too little information.  None of this is enough.

This is a crises crying out for a movement!