Furthermore, collection agencies are not bound by the Fair Debt Collection Practices Act, which protects consumers from various forms of threat and harassment, because court debts are considered “involuntary.” As a result of this loophole, said Miguel Soto, an attorney at the East Bay Community Law Center, “We’ve had clients tell us that the [debt collector] they’re dealing with is threatening them with violence, imprisonment, or, in some occasions, deportation.”
The clinic is run by the Center’s Clean Slate Practice, which focuses on “the decriminalization of poverty,” according to Brandon Greene, one of its lead attorneys. Some of Greene’s colleagues do post-conviction work, helping to seal arrest records, reduce probation, and help people who’ve been denied employment because of criminal backgrounds. But Greene’s clients are facing a particular set of issues: court-ordered debt related to things like traffic violations and parking tickets.
“This system perpetuates a cycle of debt and poverty that disparately affects people of color; people of color are disproportionately represented in the criminal justice system in California and this involuntary debt can affect the building of intergenerational wealth.” Theresa Zhen, Staff Attorney, East Bay Community Law Center.
SB 298, by Sen. Bob Wieckowski (D-Fremont), would automatically exempt up to $2,250 per debtor from bank levies — that’s when a judge gives a creditor approval to seize money from an account. More than 100,000 bank levies are served every year statewide, according to research by the East Bay Community Law Center.
Some defendants will even pay a wrongfully assigned debt off because the amount of the debt is less than the money it would cost to fight the matter in court. Sharon Djemal, director of the Consumer Justice Clinic at the East Bay Community Law Center – which is assisting Christy in her case – tells Consumerist that the Center sees at least one person each week dealing with these same unfair debt collection scenarios.
Unscrupulous debt collection agencies have misused the courts to steamroll low-income consumers in recent years, but the State of California took a major step towards ending these unfair practices when Governor Jerry Brown signed into law the Fair Debt-Buying Practices Act (SB 233).