A Crushing Burden on Families
Anita Belcher, a single working grandmother of color raising three of her grandchildren, was shocked when 25% of her wages were inexplicably garnished without warning. Ms. Belcher was a victim of “sewer service,” a common practice of debt collectors to falsely claim a defendant has received notice of a debt collection lawsuit.
Victims of “sewer service” lose their case when they fail to appear in court, because they were never served, and the courts issue judgments against them. This allows collection agencies to seize money (wages or savings) they claim is owed. When wages or savings are seized, catastrophic financial and personal consequences often follow.
The people most impacted by this practice are those already stretching every dollar to cover rent, food, utilities, and other necessities. Women, especially Black, Indigenous, and other women of color, are disproportionately harmed. Very few low-income people have the financial cushion to fight back against unscrupulous collection agencies.
Without legal assistance, people in Ms. Belcher’s position are ill-equipped to effectively present evidence to defend themselves, much less counter improper and unlawful legal proceedings like sewer service. Disparities are stark. While debt collectors are represented by attorneys nearly 100% of the time in collection cases, the rate of victims representing themselves without a lawyer is almost 99%.
Northwest Justice Project provides FREE legal services to low-income people, like Ms. Belcher, forced to confront difficult civil legal issues with damaging consequences. Ms. Belcher worked with NJP attorneys through a lengthy battle to prove she was never served with the lawsuit and was not responsible for the debt falsely claimed by the collection agency. In the end, the case was settled, and the debt collector repaid the money it wrongfully collected from her, in addition to attorney’s fees.
A Profit-Driven Industry
Debt collection is a crushing burden for millions of people like Ms. Belcher. In the United States, consumer debt reached an unprecedented $1 trillion in the second quarter of 2023. Debt collection is a profit-driven industry that zeroes in on debt that creditors have been unable to collect.
The debt industry initiates hundreds of thousands of lawsuits a year nationwide, making it the fastest-growing case category in the civil justice system. About 25% of civil court cases now involve lawsuits initiated by debt collectors. To cope with this volume, the industry has automated many of its processes, dehumanizing debtors in the process.
In Washington State, individual courts are often flooded with many dozens of debt cases at a time. The courts struggle to keep up with a staggering volume of cases, most of which result in default judgments after just minutes of review for accuracy for each individual case. Courts also generate revenue from filing fees for each case, and some courts depend on fees like this to support their administration.
Opening Doors to Just Outcomes
With a well-funded debt collection industry, victims of these practices face challenges at every step of the way without legal representation. Northwest Justice Project opens the door to justice for victims of the debt collection industry. Standing with clients, NJP sheds light on an inherently flawed credit system that abuses the law to perpetuate a harmful debt cycle and financial distress.