Madigan pushing to limit debt collectors' use of arrest warrants
The Wall Street Journal
The top state law-enforcement official in Illinois said she plans to fight the use of arrest warrants by debt collectors pursuing money they are owed on credit cards, auto loans and other bills.
Illinois Attorney General Lisa Madigan, in an interview, vowed to push state-court judges to quash arrest-warrant requests by lawyers representing the fast-growing debt-collection industry. Madigan also said she will file enforcement actions against companies that "abuse" their power to seek arrest warrants under Illinois law.
"We can no longer allow debt collectors to pervert the courts," said Madigan, a Democrat who took office in 2003.
More than one-third of U.S. states allow borrowers who can't or won't pay to be jailed. Nationwide statistics aren't known because many courts don't keep track of warrants by alleged offense, but a tally by The Wall Street Journal earlier this year of court filings in nine counties across the U.S. showed that judges signed off on more than 5,000 such warrants since the start of 2010.
In Illinois, the practice is "flourishing statewide," Madigan said, though exact numbers aren't available.
A debt-related arrest warrant is typically issued when a borrower who was sued for payments on an outstanding debt doesn't show up in court or fails to make payments ordered by a judge.
Debt collectors say the threat of jail is used only as a last resort. "Debt collectors aren't advocating for debtors' arrests," said Mark Schiffman, a spokesman for ACA International, the industry's main trade group.
Some judges have criticized the use of such warrants, comparing them to a modern-day version of debtors' prison. Madigan said she has grown increasingly concerned that borrowers sometimes are being thrown into jail without even knowing they were sued, a problem she blames on sloppy, incomplete or false paperwork submitted to courts.
Other defendants avoid showing up in court because they can't afford to pay and fear they will be sentenced to jail, a "perverse Catch-22," she said. A March article in the Journal about the use of arrest warrants in debt-collection lawsuits "helped shed light on a practice we need to address," she added in the interview.
In September, Vivian Joy, 53 years old, was handcuffed and taken to a jail in Champaign, after being stopped for driving with a broken taillight. A public-records search by the police had shown an outstanding arrest warrant because Joy didn't appear in court following a default judgment against her over $2,200 owed to Champaign Heights Finance Corp., based in Peoria.
"They cuffed me in front of my kids. That was terrifying," said Joy, who claims she didn't know about the lawsuit or judge's order until her arrest. She said she owes the money but can't afford to pay because she has no job.
Joy was released after she posted a $120 bond. The finance company and police officials couldn't be reached for comment about the arrest warrant.
Madigan can't force judges to stop signing off on debt-related arrest warrants. Still, she predicted that many Illinois judges will agree with her once they fully understand the practice.