Zombie debts are hounding struggling Americans(theguardian.com)
theguardian.com
Zombie debts are hounding struggling Americans
https://www.theguardian.com/law/2019/oct/15/zombie-debt-benefits-overpayment-poverty
44 comments
This is ripe for a lawsuit. Not only should the statute of limitations apply to all of this debt, but confiscating independently earned money from your children is a modern version of holding one's children responsible for the sins of their parents — a defacto caste system.
Suing the government is very hard [0].
There are many flaws in the US Tort system, but it at least incentivizes law firms to create class action suits to fix stuff like this article describes when private entities are the ones doing the behavior we want to change.
When it’s the government, these types of class action suits are rare, I think.
A better attempted solution would be to write to congresspeople.
Cynically, I would try to find some globocorp that could benefit from having this function privatized. At least then there would be a regulator and two different orgs to argue.
[0] https://www.wikihow.com/Sue-the-Federal-Government
There are many flaws in the US Tort system, but it at least incentivizes law firms to create class action suits to fix stuff like this article describes when private entities are the ones doing the behavior we want to change.
When it’s the government, these types of class action suits are rare, I think.
A better attempted solution would be to write to congresspeople.
Cynically, I would try to find some globocorp that could benefit from having this function privatized. At least then there would be a regulator and two different orgs to argue.
[0] https://www.wikihow.com/Sue-the-Federal-Government
Class action suits against the US government (or states) are rare because even if the plaintiff class wins, the government still has to volunteer to pay (in most cases). Sometimes it even requires the legislature budgeting the funds for payment.
Since class action lawyers generally rely on the proceeds of the lawsuit to collect expenses plus ~35% of the proceeds as their fee, it's highly risky for them to take such a case.
Additionally, since the cases in the article are to essentially prevent a debt collection, even if the lawyers win, there isn't necessarily going to be a payout, just an injunction.
One way to handle these situations is to eliminate administrative courts. Two, the government should have to sue to recover money from individuals as any other entity would have to do.
That being said, the article admits that in at least one of the cases, the lady was making payments on what I assume was a legitimate debt, then abruptly stopped. She was surprised to find out she still owed the remainder some years later. That's on her.
But it also makes me question the extent of the problem. If one of the 3 most sympathetic cases that they chose to write about isn't even an illegitimate debt.
Since class action lawyers generally rely on the proceeds of the lawsuit to collect expenses plus ~35% of the proceeds as their fee, it's highly risky for them to take such a case.
Additionally, since the cases in the article are to essentially prevent a debt collection, even if the lawyers win, there isn't necessarily going to be a payout, just an injunction.
One way to handle these situations is to eliminate administrative courts. Two, the government should have to sue to recover money from individuals as any other entity would have to do.
That being said, the article admits that in at least one of the cases, the lady was making payments on what I assume was a legitimate debt, then abruptly stopped. She was surprised to find out she still owed the remainder some years later. That's on her.
But it also makes me question the extent of the problem. If one of the 3 most sympathetic cases that they chose to write about isn't even an illegitimate debt.
1) Statue of limitations doesn't apply to government debt (or actions). (With some rare exceptions.)
>confiscating independently earned money from your children
2) The "child" is only involved because the welfare benefits were claimed using her as a dependent or claimant. That same child's Taco Bell wages put them over the limit to qualify for benefits, but those wages were also not included on the application.
This probably falls on the mother for claiming a child that was no longer a dependent. Or purposefully excluding income in order to qualify. But it still is attached to the child. And for all we know, the child could be the one who lied about her income.
Assuming it was the mom's fault, it was shitty of the mother to do, but the child is still liable. Just as if the mom opened a credit card in the kids name and ran up debt.
>confiscating independently earned money from your children
2) The "child" is only involved because the welfare benefits were claimed using her as a dependent or claimant. That same child's Taco Bell wages put them over the limit to qualify for benefits, but those wages were also not included on the application.
This probably falls on the mother for claiming a child that was no longer a dependent. Or purposefully excluding income in order to qualify. But it still is attached to the child. And for all we know, the child could be the one who lied about her income.
Assuming it was the mom's fault, it was shitty of the mother to do, but the child is still liable. Just as if the mom opened a credit card in the kids name and ran up debt.
Government services are suppose to help people. When States are staving for cash, how can this possibly make up the difference? Surely getting all these elderly or working poor people for a couple thousand here or there (trivial for the government and the well off or middle class; disastrous for those on fixed incomes) cannot even hope to clear the cost of the State workers and contractors hired to do the collections work and handling the bullshit appeal process (even if it is just rubber stamping things).
This is the problem: the State is turning to the enemy of the poor in the US, and if you crunched the numbers, they're probably not even earning that much off these people. It's fucked up.
This is the problem: the State is turning to the enemy of the poor in the US, and if you crunched the numbers, they're probably not even earning that much off these people. It's fucked up.
>This is the problem: the State is turning to the enemy of the poor in the US, and if you crunched the numbers, they're probably not even earning that much off these people. It's fucked up.
I honestly can't see how it can even be about money when you have government agencies stripping drivers licenses and vocational certificates from people for defaulting on student loan payments. At that point, the government's taking away their ability to work and earn an income in response to them not paying a debt. How is somebody, who likely couldn't pay it before, supposed to pay anything back when you take away their ability to actually earn a wage?
I honestly can't see how it can even be about money when you have government agencies stripping drivers licenses and vocational certificates from people for defaulting on student loan payments. At that point, the government's taking away their ability to work and earn an income in response to them not paying a debt. How is somebody, who likely couldn't pay it before, supposed to pay anything back when you take away their ability to actually earn a wage?
The modern US government is impossible to hold accountable and it has been this way for some time. At no point in my life have I seen the government as something that will help me.
I am honestly surprised there is not more violence due to police brutality, discrimination, asset forfeiture, and now this.
I am honestly surprised there is not more violence due to police brutality, discrimination, asset forfeiture, and now this.
"Government violates the Fair Debt Collection Practices Act and harasses seniors for debts that are outside the statute of limitations" FTFY
Sounds like the government is exempt so they're not violating the letter of the law but certainly are violating the spirit of the law.
The law prohibits aggressively collecting expired debts. Government debts don't expire. I'd say that's still within the spirit.
If it hasn't already, this will be used for the next round of phone scams.
Statute of limitations should apply in situations like this. It's really weird that it doesn't.
Even the Statute of Limitations is gone in the US. Companies can sue you in court for debt right before the limit is up and your debt limitations has just increased 20 years. They also tack on interest. Someone I know had $4K debt that ballooned to $25K due to this tactic. The original debt is from 1997 and this person is still on the hook.
It's all corrupt.
https://creditcards.usnews.com/articles/what-happens-when-yo...
It's all corrupt.
https://creditcards.usnews.com/articles/what-happens-when-yo...
> Companies can sue you in court for debt right before the limit is up
Nothing wrong with that. The point of any statute of limitations is to prevent action after a period has elapsed, with the full range of remedies available before that.
Edit: why the downvotes?
Clearly many posters here do not know what a statute of limitations means, and assume it means something it doesn't.
Obviously this depends on the jurisdiction, but in general, and as mentioned, it puts a limit on how long one has to sue.
But if a lawsuit is started right before the limit then obviously the limit does not apply and the lawsuit and any court order will stand.
Nothing new here. This is how it is meant to work. Don't shoot the messenger.
Nothing wrong with that. The point of any statute of limitations is to prevent action after a period has elapsed, with the full range of remedies available before that.
Edit: why the downvotes?
Clearly many posters here do not know what a statute of limitations means, and assume it means something it doesn't.
Obviously this depends on the jurisdiction, but in general, and as mentioned, it puts a limit on how long one has to sue.
But if a lawsuit is started right before the limit then obviously the limit does not apply and the lawsuit and any court order will stand.
Nothing new here. This is how it is meant to work. Don't shoot the messenger.
> Nothing wrong with that.
there is if you are deliberately using interest compounding and deferring the suit vs a likely slow repayment schedule which would result if the debt was settled earlier in order to expand your balance sheet and maximize your profits..
this is not acting in good faith.
there is if you are deliberately using interest compounding and deferring the suit vs a likely slow repayment schedule which would result if the debt was settled earlier in order to expand your balance sheet and maximize your profits..
this is not acting in good faith.
This is a perfectly legitimate course of action, not least because the debt and interests were freely agreed.
A statute of limitations is not aimed at helping people wriggling out of paying off their debts. Depending on the debt and jurisdiction there is bankruptcy for that.
A statute of limitations is not aimed at helping people wriggling out of paying off their debts. Depending on the debt and jurisdiction there is bankruptcy for that.
> A statute of limitations is not aimed at helping people wriggling out of paying off their debts. Depending on the debt and jurisdiction there is bankruptcy for that.
Nor is it intended to maximize your profit margin.
If you know there is a debt, and further, that it accrues interest, you should (in good faith) attempt to collect it as soon as you possibly can.
This is literally the definition of acting in good faith.
random goog:
further there is something (IANAL) in the law about 'reasonable attempts at attempting to remedy breach of contract', which would apply in not following up with someone who is not making payments.
I'm not arguing for random debt forgiveness as others in this thread (and you're right - there is bankruptcy for that, etc), but pointing out that there is, in fact, literally and by the law 'something wrong with' letting debts accumulate on purpose for the purpose of profit maximization.
I again am not a lawyer, but wouldn't be surprised if someone could actually attempt to defend against some tort on these lines - especially if profit maximizing intent could be proved - while the debt wouldn't be stricken, the interest compounded could conceivably be since it accrued within the context of a bad-faith use of the situation.
Nor is it intended to maximize your profit margin.
If you know there is a debt, and further, that it accrues interest, you should (in good faith) attempt to collect it as soon as you possibly can.
This is literally the definition of acting in good faith.
random goog:
"Acting in good faith, or bona fide, as it is sometimes also referred to by the courts,
refers to the concept of being sincere in one's business dealings and
without a desire to defraud, deceive, take undo advantage, or in any way
act maliciously towards others."
further there is something (IANAL) in the law about 'reasonable attempts at attempting to remedy breach of contract', which would apply in not following up with someone who is not making payments.
I'm not arguing for random debt forgiveness as others in this thread (and you're right - there is bankruptcy for that, etc), but pointing out that there is, in fact, literally and by the law 'something wrong with' letting debts accumulate on purpose for the purpose of profit maximization.
I again am not a lawyer, but wouldn't be surprised if someone could actually attempt to defend against some tort on these lines - especially if profit maximizing intent could be proved - while the debt wouldn't be stricken, the interest compounded could conceivably be since it accrued within the context of a bad-faith use of the situation.
It doesn't really jibe with the word, "limitation," if you can constantly increase it leveraging the court system.
"A statute of limitations is a law passed by a legislative body in a common law system to set the maximum time after an event within which legal proceedings may be initiated." - Wikipedia
That's exactly what 'limitation' means. It means no action after a certain period. That's how it works everywhere.
From what the earlier poster is saying, the companies are getting around that by filing a lawsuit just before that period would expire. Then they not only get to collect on the debt for however long they can draw out the lawsuit for, they get to collect interest as well, as if the statute of limitations never existed.
They are not getting around anything. As explained this is the way it is intended: As long as you begin legal action before the deadline then indeed the statute of limitations does not apply at all (mileage may vary by jurisdiction).
A statute of limitations is not aimed at helping people wriggling out of paying what they owe (among other things). It is aimed at putting a reasonable time limit on taking legal action.
A statute of limitations is not aimed at helping people wriggling out of paying what they owe (among other things). It is aimed at putting a reasonable time limit on taking legal action.
The ACLU did a writeup on it. This seems to me to be a fairly recent phenomenon (within the last 20-30 years). Another example of the corruption of our government generally favoring business interests at the cost of citizens. It's so bad now, we have debtor's prisons now all except in name. We just call it regular prison.
https://www.aclu.org/sites/default/files/field_document/0221...
https://www.aclu.org/sites/default/files/field_document/0221...
If you respond to these lawsuits, they generally have no documentation. Ignoring them is a mistake.
If I’m reading the article correctly and following the governments line of reasoning these cases have already seen trial and are not going to trial now. Hence no statue of limitations issues.
But I agree with you - there needs to be consideration for the debtors in light of the negligence of the collector
But I agree with you - there needs to be consideration for the debtors in light of the negligence of the collector
Debt does have a statute of limitation that varies state to state [0]. So even if there is a trial and judgement, after a certain amount of time it is invalid and there is no legal recourse to collect (although collectors will still ask).
I think the issue here is that this debt is not subject to the statute of limitations. Some other federal debts- student loans- have similar exemptions and special considerations.
[0] https://www.incharge.org/understanding-debt/credit-card/what...
I think the issue here is that this debt is not subject to the statute of limitations. Some other federal debts- student loans- have similar exemptions and special considerations.
[0] https://www.incharge.org/understanding-debt/credit-card/what...
> The “Statute of Limitations” for credit card debt is a law limiting the amount of time lenders and collection agencies have to sue consumers for nonpayment.
This makes it sound like the limitation is on how long you have before you can't sue. But if you have already sued and won then the statute of limitations wouldn't apply. I think instead there is a time limitation for collecting on the judgment from the suit.
This makes it sound like the limitation is on how long you have before you can't sue. But if you have already sued and won then the statute of limitations wouldn't apply. I think instead there is a time limitation for collecting on the judgment from the suit.
Yes and in some states judgements can be renewed indefinitely.
Debts owed to the government don't usually expire, whether via statue of limitations or otherwise. This is fairly universal.
They view it just the same as if you owe taxes from 20 years ago.
They view it just the same as if you owe taxes from 20 years ago.
SOL can altered retroactively as in pedophile cases where they have been abolished.
Does anyone know what law governs ISAs? Like why would a Lambda school be able to forcibly collect income if a student tried to vanish without paying if they found a job?
They're contracts, so generally contract law. Although such contracts would have to be careful to not run afoul of employment laws, or laws against slavery.
It seems income sharing agreements typically include clauses which mitigate their risk of becoming invalid as voluntary slavery, such as limited time, a minimum income threshold, and buyout options. They could also be structured as a debt, with a payment structure based on income. Potentially bankruptcy law would affect their interpretation also.
It seems income sharing agreements typically include clauses which mitigate their risk of becoming invalid as voluntary slavery, such as limited time, a minimum income threshold, and buyout options. They could also be structured as a debt, with a payment structure based on income. Potentially bankruptcy law would affect their interpretation also.
Interesting. Yeah seems like a legal gray area. I could see one bad Supreme Court case turn them on it’s head.
Contract law
"And then, in December 2010, the Claims Resolution Act passed. This historic piece of legislation settled an unresolved court case in favor of 75,000 black farmers unjustly denied agricultural loans in the 1980s and 1990s. Ironically, tucked into its 801st section was a provision to increase the “collection of past-due, legally enforceable state debts”. It quietly expanded which debts could be referred to Treasury, from only those due to fraud to those resulting from unintentional errors."
How the (#$*) did Obama let that get out of the first committee reading (Warren wasn't elected yet)?
How the (#$*) did Obama let that get out of the first committee reading (Warren wasn't elected yet)?
Because he was never the poor man's savior that everyone made him out to be?
Obama (or any president) is not responsible for every line of every proposed bill that makes it through a committee reading. It's not his job. Blame the committee chair at the time.
Do you think he actually read all 800+ articles?