The Return of the Debtor Prison

by lizard

Money. If you have it, you can do things, like spend 9 years in litigation against the city of Missoula in a complicated land grab stemming from the reconstruction of South Avenue. Money can also provide insulation from litigation, as this little bit from the article highlights:

According to Orr, the city could have pursued a legal claim against WGM Group, but it didn’t take the opportunity. Court records show WGM’s surveyor testified he believed the land belonged in the right-of-way given historic records.

This whole case could have been avoided, and taxpayer money could have been saved, but it appears there were other, more personal considerations at play behind the decision to litigate against a property owner who regularly protests his tax burden instead of pursuing claims against Brent Campbell’s WGM Group:

After many conversations, the Wohls lawyered up, and Orr sent a couple of letters to the city to try to settle out of court. He wanted to send a third, but after reading one piece of correspondence from the city, Glen Wohl said enough was enough.

The city had sent a letter to Orr making note of all the times Wohl had appealed his tax payments. Montana law allows property owners to appeal real estate assessments, and, Wohl said, “I’ve done it a lot over the years because I have a fair amount of property.”

“You pay your taxes, you just pay them under protest,” Johanna Wohl said.

“I was really offended by that,” Glen Wohl said of the letter.

“Then, he knew it was going to be personal,” Johanna Wohl said.

In contrast to this local drama, a recent article from The Nation describes what happens to people who don’t have money in a piece titled The Town That Turned Poverty Into A Prison Sentence:

At the single stoplight in Harpersville, Alabama, Debra Shoemaker Ford saw the police lights flash. On that January day in 2007, she steered her beat-up black Chevy Blazer into the parking lot, under the big red dot advertising Jack’s restaurant. The officer said she had a taillight out. He asked to see her license.

Ford didn’t have one. Her license had been revoked after she failed to pay a court judgment against her for a traffic ticket in a nearby town. She hadn’t worked since a car wreck a decade earlier, surviving instead on disability payments of about $670 a month. That meant generic washing powder instead of Purex. Cigarettes, when she allowed herself, were rationed, each drag a pleasure measured in pennies. To pay the ticket, plus the fee to reinstate her license, would have meant going without essentials. Though she knew she shouldn’t, Ford, a small white woman in her 50s with a fringe of bangs and a raspy voice, regularly climbed behind the wheel of the old Chevy. In rural Alabama, it’s the only way to get around.

Ford left the parking lot with tickets for no proof of insurance and driving without a license, which would come to $745 with court costs. She didn’t know it yet, but they would also cause her to spend years cycling through court, jail and the offices of a private probation company called Judicial Correction Services. JCS had contracted with the town of Harpersville several years earlier to help collect on court fines, and also to earn a little something extra for itself. It did this by charging probationers like Ford a monthly fee (typically between $35 and $45) while tacking on additional fees for court-mandated classes and electronic monitoring.

Ford tried to meet her mounting debt to Harpersville, but as the months passed and the fees added up, she fell behind and stopped paying. In June 2007, the company sent a letter telling her to pay $145 immediately or face jail. But the letter was returned as undeliverable—a fact that did not stop the Harpersville Municipal Court from issuing a warrant for her arrest. Almost two years later, in January 2009, Ford was arrested on that outstanding warrant and promptly booked in the county jail—where, to offset costs, the town charged her $31 a day for her stay.

Ford spent seven weeks in jail, during which time her debt grew into the thousands. She did not, however, see the inside of a courtroom. All the lawyer hired by her family managed to do was to eventually get her transferred to a work-release program, which stopped her jail fees from growing and allowed her to live in a closed facility, the Shelby County Work Release Center, while going to work. Ford found a minimum-wage job at a local thrift store, but after buying food and handing a cut to the work-release program—40 percent of her gross earnings—there wasn’t much left to pay off the fines that kept her there. What had started as a simple traffic violation had become an indefinite sentence in a debtors’ purgatory—one that would take years to pay her way out.

“It shouldn’t have been that much punishment,” Ford recalled later. “I was guilty—no license and no insurance—but I was trying to fix it. I was trying to make my wrong right, and there was no way they was gonna let me.”

Please read the whole article, it’s incredibly disturbing. And it’s happening here in Missoula (maybe this would be a good story for our local media to cover). The difference is Missoula hasn’t gotten to the point of forcing people to pay for the cost of their incarceration and probationary supervision. But let’s say you get a ticket for open container, and you don’t pay, then a bench warrant is issued and jail time is served.

Maybe debtor’s prisons will be the future housing solution for the Millennial generation. Ralph Nader has a piece in Counterpunch today titled What A Destructive Wall Street Owes Young Americans where he puts forward the radical notion of taxing Wall Street transactions to help Millennials with their trillion dollar student debt burden. Here’s a quick recap of the problem:

Wall Street’s big banks and their financial networks that collapsed the U.S. economy in 2008-2009, were saved with huge bailouts by the taxpayers, but these Wall Street Gamblers are still paid huge money and are again creeping toward reckless misbehavior. Their corporate crime wave strip-mined the economy for young workers, threw them on the unemployment rolls and helped make possible a low-wage economy that is draining away their ability to afford basic housing, goods, and services.

Meanwhile, Wall Street is declaring huge bonuses for their executive plutocrats, none of whom have been prosecuted and sent to jail for these systemic devastations of other peoples’ money, the looting of pensions and destruction of jobs.

And here’s the solution:

Millions of young Americans (called Millennials, between ages 18 and 33) should start agitating through demonstrations, demand petitions and put pressure on the bankers and members of Congress. First the plutocrats and their indentured members of Congress should drop their opposition to a transaction tax on Wall Street trading. A fraction of a one percent sales tax on speculation in derivatives and trading in stocks (Businessweek called this “casino capitalism”) could bring in $300 billion a year. That money should go to paying off the student debt which presently exceeds one trillion dollars. Heavy student debt is crushing recent graduates and alarming the housing industry. For example, people currently between the ages of 30 to 34 have a lower percentage of housing ownership than this age group has had in the past half century.

A Wall Street transaction tax was imposed in 1914 and was more than doubled in 1932 to aid recovery from the Great Depression before it was repealed in 1966. But the trading volume then was minuscule compared to now with computer-driven trading velocity. A tiny tax – far less than state sales taxes on necessities – coupled with the current huge volume of trading can free students from this life-misshaping yoke of debt.

Mounting debt and the destruction of economic opportunity will continue to impact an entire generation, the generation I should add who will be taking care of aging Boomers.

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  1. Ha, I got a good laugh out of this one, due to a coincidence.

    I’m finishing up a sci-fi novel for someone. He had the idea of debtor’s prisons coming back, and that’s about it.

    In the story I made it so most poor people are living in the Debtor Zone, not in the walled-city of Freetown. Harmony Systems forces everyone to wear a debtor band, which tracks your debt and shows a green band.

    If the band turns to red the debtor police break into your home and take you to the debtors prisons (these are nothing more than old banks, the ATM’s now the entrances).

    Of course at the end of the book Harmony Systems is overthrown and everyone lives in bliss.




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