How Lenders Are Turning Low-Level Courts Into Dickensian ‘Debt Collection Mills’

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BY: Rebecca Burns 03.01.18


On Christmas Eve in 2013, an out-of-work welder named Rex Iverson was rushed to a Utah hospital. He survived, but was hit with a hefty bill for the ambulance ride. There is a widespread assumption that indigent patients never have to pay emergency room bills they can’t afford, and instead the cost is passed on to those with insurance.

But in fact companies and municipalities pursue such debts aggressively. In Iverson’s case, the city operating the ambulance service won a $2,300 judgement against him in small claims court, but he had no wages to garnish. A judge issued a warrant for Iverson when he didn’t return to court to discuss the unpaid debt.

“We go to great lengths to never arrest anybody on these warrants,” Box Elder County Chief Deputy Sheriff Dale Ward later said. “But we make every effort to resolve the issues without making an arrest on a civil bench warrant. The reason we do that is we don’t want to run a debtors’ prison. There is no reason for someone to be rotting in jail on a bad debt.”

In January 2016 a deputy sheriff knocked on Iverson’s door and arrested him. The judge had set a $350 bail, which Iverson told jail officials he could not pay. Later the same day, Iverson, 45, was found dead in a holding cell, an all-too-common occurrence in American jails. An investigation determined that he had killed himself by ingesting strychnine poison.

The sheriff’s office “made every effort to keep Mr. Iverson out of jail in relation to warrants issued regarding this debt,” Ward told The Intercept in a statement, noting that his office would not defy a court order. “When the court issues a warrant for arrest we are obligated to serve that warrant as ordered, no matter what the underlying reason may be.”

Iverson’s story is just one of many documented in a damning new report from the American Civil Liberties Union that finds that collectors ranging from federal student lenders, to third-party debt buyers, to utility and ambulance services routinely wield the threat of arrest to intimidate people into paying up.