Article, Pro Bono Debt Collection Assistance

• Publication year: 2024
• Citation: Vol. 37 No. 2 Pg. 48
• Pages: 48

Article, Pro Bono Debt Collection Assistance -What I Have Learned Thus FarVol. 37 No. 2 Pg. 48Utah Bar JournalMarch 2024

March 2024

Article

By George Sutton

I began volunteering to assist pro se defendants in debt collection cases as I approached retirement. It was a good fit with my career as a financial services attorney and regulator. Although I am not an experienced litigator - my first trial in thirty-five years was a pro bono bench trial in 2017 - I soon discovered that a basic knowledge of procedure, evidence, and contracts was enough to help those caught in a system that in many cases scares them and that they may not understand. I mostly assist pro se defendants one day each month with hearings in Third District court as part of a program administered by the Bar. These defendants are typically low-income working people who cannot afford an attorney and do not know how to navigate the judicial system. The goal is to at least help them understand what is happening to them and their options.

The Pro Se Calendar Volunteer Program

The program assisting pro se debt collection defendants is only offered in the Third District. (Regrettably, a judge in the Fourth District recently told me he didn't think they could get enough volunteers to support a similar program there.) It consolidates contested hearings involving a pro se defendant and a plaintiff represented by an attorney. Pro se defendants file answers or dispute charges in only a small percentage of cases. The rest usually end up as default judgments entered by judges' clerks after confirming that no answer was filed.

The benefits of this program are summarized in a recent report released by the Bar covering years 2022 to 2023. Utah State Bar Pro Bono Commission, 2022-23 Pro Se Calendar Volunteer Program Report (2023), https://rb.gy/xyxed4. Attorneys were appointed in 835 hearings (compared to 635 hearings the year before). Id. at 3. The report found that as of November 2023, 34% of cases had been dismissed, 50% had been resolved by a stipulation that had not been breached, and only 16% involved stipulations that had been breached. Id. at 6. Even the plaintiffs benefit from the stipulations. I am often thanked by the plaintiff's attorney as well as my client for helping resolve a case. The report does not include disputed cases the parties cannot resolve either by motion or agreement. Those are sent back to the judge originally assigned the case for trial. I also assume many of the dismissals occurred after the defendant fulfilled all the terms of a stipulation or filed bankruptcy.

The report listed the largest groups of cases as housing (350), consumer (201), and medical (167). Id. at 5. "Housing" cases involved claims of unpaid debts owed by prior tenants. It did not include evictions. Id. Consumer cases consisted of unpaid credit cards and other loans. Id. at 4. Medical claims did not include dental. Id. at 5. The remaining seven categories totaled 120 cases. Id.

The report also lists the top ten law firms representing plaintiffs in these cases. Id. at 7. Most of these cases are brought by a small number of attorneys. Id.

The Importance of the Program for Pro Se Defendants

This program is the best solution currently available to address a serious flaw in the system. Many defendants don't understand why they have been sued or the consequences of their options. Suits filed years after the purported debt arose are often a complete surprise and pose a serious financial threat to the defendants. Most don't realize that disputing claims or asking for a hearing is a gamble that can result in a judgment several times larger than the original debt, or how the risk of garnishments can affect their employment and ability to make rent and other payments, or how a judgment will affect their credit score and ability to rent apartments or eventually apply for a mortgage. Although the amounts at stake are relatively small, the consequences can be more devastating than other defendants face. Many of these people have limited or no ability to deal with unexpected expenses and may end up homeless and bankrupt if garnishments begin. This volunteer program and the assistance provided by a few pro bono and low bono legal organizations are the best tools to help someone understand those risks and make good decisions about how to proceed.

GEORGE SUTTON is recently retired after a forty-five year career that included being Utah Commissioner of Financial Institutions and a shareholder at Jones Waldo.

The problem goes much deeper. The advantage a plaintiff's attorney has when a defendant has no legal training is prone to abuse. These cases are kept on the regular court calendar so a district judge can review them. But I am sure there are many judgments, perhaps thousands, based on invalid claims that are unexamined and unchallenged because the defendant defaults. Some defendants simply don't understand what is happening and how to respond so they do nothing. They live day to day and paycheck to paycheck. Judgments and collections are tomorrow - until the garnishments start. That is why a fair number of hearings are objections to garnishment after a default judgment was entered. There is usually no flaw in the garnishment; it is just the first time the defendant realizes the consequences of getting sued and they need to tell a judge why they can't afford to have a quarter of their income seized.

To be sure, many defendants owe the debt and the ability to enforce contracts and collect debts is important. Credit doesn't work if there is no remedy for failing...