On behalf of the California Administrative Office of the Courts, we would like to know if there are any courts in the United States that “sell” delinquent court-ordered fines, fees, penalties, and assessments. In specific, we are looking for criteria, and private vendors used, including pricing structure.
1. I asked one of my clients, a pre-eminent collections firm that also specializes in purchasing debt, how many government clients use this technique, and of those how many are courts. They replied that few (but a growing number) of government agencies are beginning to realize that this is a legitimate way to recover otherwise lost revenue, but the number of courts is painfully fewer.
Part of the reason is understandable ... the underlying nature of the debt has to be free of other legal encumbrances, such as terms and conditions of probation, drinking driver treatment program completions, etc., and ideally those debts that are dispositive solely by payment of the fine. This being said, that leaves a siginificant amount of court ordered debt that could or should fall into this category.
Since the street value and therefore the amount paid for old and uncollectable debt is low, it is best that courts exhaust all reasonable efforts to skip trace and otherwise seek compliance before this option is used. Thereafter, merely writing off the debt as a total loss is unwise if there is a way to recover some of the amount due.
2. Selling court debt that arises from a conviction for an offense is an appalling concept.
Generally, most court debt for an offense is discretionary, that is a judge exercised some discretion to establish the fine, etc., in a particular case. Generally, the court that entered the judgment retains the ability to exercise discretion in the interests of justice if the circumstances of the judgment debtor change following the entry of judgment. Typically it is a negative change in circumstances that is brought to the attention of the court in an enforcement action. The court may then adjust the debt to fit the new circumstance as appropriate.
Selling the judgment eliminates that discretion. While courts should vigorously enforce judgments entered for offenses, may even use private collection agencies, courts must also retain the discretion to deal appropriately judgment debtors in the interest of justice, not in the interest of a "bottom line."
3.And my recollection is that there is a [U.S.] Supreme Court decision that says in effect some who is fined must be given the equivalent of an installment plan (in the context of "you may not jail for failure to pay fine").**
*In deference to privacy and confidentiality concerns expressed by some readers, all references to personal names in the above responses have been deleted. This however does not detract in any way from our appreciation of the professionalism and generosity of spirit exhibited by those participating in this discussion.
** In part of an exchange resulting from the above discussion, Patrick H. Scott, Court Services Division, Arizona Administrative Office of the Courts sent the following additional material related to the U.S. Supreme Court decision mentioned in the above Q & A discussion. In his e-mail Patrick said he found this information at Dictionary.com:
The U.S. Supreme Court has placed limits on incarceration for nonpayment of fines. In Williams v. Illinois, 399 U.S. 235, 90 S. Ct. 2018, 26 L. Ed. 2d 586 (1970), the defendant, Willie E. Williams, was convicted of petty theft and sentenced to one year in prison and a $500 fine, the maximum sentence allowed under the applicable statute. When Williams was unable to pay the fine upon completing his year in jail, he was kept incarcerated to "work off" the fine at a rate of $5 a day. Williams appealed, and the U.S. Supreme Court ruled that, under the equal protection clause of the Fourteenth Amendment, no state may increase the sentence of a defendant beyond the maximum period specified by statute for failure to pay a fine.
Shortly after the Williams case, the Supreme Court ruled that a state may not convert a fine into incarceration if the conviction warrants only a fine. In Tate v. Short, 401 U.S. 395, 91 S. Ct. 668, 28 L. Ed. 2d 130 (1971), the defendant, Preston A. Tate, was unable to pay $425 in fines for traffic offenses and was committed to prison to work off his fine at a rate of $5 a day. The Supreme Court ruled that a state may not "impos[e] a fine as a sentence and then automatically conver[t] it into a jail term solely because the defendant is indigent and cannot forthwith pay the fine in full."
Neither the Williams ruling nor the Tate ruling prevents a court from imprisoning a defendant who is able, but refuses, to pay a fine. The court may do so after finding that the defendant was somehow responsible for the failure to pay and that alternative forms of punishment would be inadequate to meet the state's interest in punishment and deterrence (Beardenv. Georgia, 461 U.S. 660, 103 S. Ct. 2064, 76 L. Ed. 2d 221 ).
In a case of willful nonpayment, the court may order incarceration for a period of time specified under statute. In Kentucky, a prison term of up to six months may be ordered if the unpaid fine was imposed for the conviction of a felony. Nonpayment of a misdemeanor fine may result in a prison term of up to one-third the maximum authorized term for the offense committed. For a violation, the maximum term is ten days. This amount can be cumulative. For example, if a person refuses to pay the fines for ten violations, that person can be incarcerated for one hundred days (Ky. Rev. Stat. Ann. § 534.060).
Fines are often used to pay for incarceration and other sentencing costs. In 1984, Congress passed the Comprehensive crime control act (codified in scattered sections of 5, 8, 29, 41, 42, and 50 App. U.S.C.A.), which established the U.S. Sentencing Guidelines Commission. According to section 5E1.2 of the act, a federal court shall impose a fine that is at least sufficient to pay the costs of imprisonment, probation, or supervised release order. Many states have followed suit, and fines are increasingly used to defray the costs of punishment.