Only Line of Defense: In confusing world of civil debt proceedings, volunteer attorneys pick up the slack

On a Tuesday morning last Spring, Judge Mark Scurti took the bench at the District Court for Baltimore City before dozens of defendants summoned to small claims court: Some navigated the crowded courtroom with canes, some with partners and fussing children in tow, and others alone. Many were in work uniforms, ready to head straight to a shift. Others were there to speak on behalf of their elderly parents who'd been sued by creditors, having taken the morning off work.

Like most days, almost every defendant in the courtroom was black.

A couple of hurried attorneys in suits flitted in and out of the courtroom, shuffling papers and exchanging whispers with the court clerk as Judge Scurti went through a list of daily announcements in his usual gentle manner. He explained several online legal resources available to defendants, passed out pamphlets detailing their rights and the rights of the creditor suing them, and stressed that while they weren't entitled to an attorney, they may still be able to access one through the pro bono services on offer that day.

On this Tuesday morning small claims docket, debts were as high as $5,000. But many defendants come forward with debts closer to the $200-$300 range, and make it clear they would find it almost impossible to pay. The biggest-name plaintiffs on the docket buy up debts like these in bulk for pennies on the dollar, and sue for the full amount.

An attorney with the Maryland Volunteer Lawyers Service, a legal services nonprofit, called out a number of names, inviting those individuals to join her in the library down the hall where each week, they set up shop for a consumer protection clinic to help defendants navigate their cases, and pair them with pro bono attorneys, many putting in their volunteer hours from large corporate firms. She explained that she and her team had identified theirs as cases that could benefit from a closer look from her team, stressing that the service is free.

For most defendants, it's the only time they will consult a lawyer about their case—the debts are often too small to justify hiring an attorney, and few could afford one anyway. Debt buyers bring small claims cases to District Court by the thousands, clogging the court system. Many cases are auto-generated from reams of bulk-bought debt data that, despite federal penalties by the Consumer Financial Protection Bureau, are still prone to errors. It's errors like these that MVLS is here to find, in addition to smoothing out the patterns they see again and again: defendants who don't recognize the third-party creditor suing them, misunderstandings about the court process, or confusion around shared responsibility of a co-signed debt.



In the summer of 2016, MVLS called Jannie Hamond's name. She was being sued for around $3,000 after missing payments on a bail bond she had co-signed with two of her family members. It was a textbook case for MVLS: somewhere in the mix of shared responsibility across several members of one family, all on low incomes and not living together—the payments stopped. Then the court summons arrived.

Sharing a debt is confusing business—just piecing together Jannie Hamond's story took a series of phone calls to various households as the Baltimore family raced between jobs, children, grandchildren, and caring for their sick mother.

Staying on top of a shared payment plan proved a challenge.

Several months prior, Hamond's niece Tiffany had been detained on a domestic violence charge—her boyfriend had accused her of hitting him in a fight—a claim she denies.

Tiffany, who has three children, was bailed at $75,000. "I didn't know anything about bail bonds," Tiffany's mother, Hazel, told me over the phone. So she consulted some better-informed friends, then marched down to Fred Frank Bail Bonds, determined to buy her daughter out of jail. She bristled at thought of Tiffany spending the night in a cell.

"It's nasty in there. It's dirty—[Tiffany] couldn't wait to get out and take a shower," Hazel recalled after a shift at a rental car company where she now works three days a week. But when she went in for the bail bond, Hazel was unemployed, and quickly learned that she didn't qualify to sign up for a bond payment plan on her own. So Jannie, her sister, stepped up to share the burden. She has no children, and likes to help out her niece whenever she can.

Crucially, Jannie also had a full-time job and a bank account, the key requirements to secure a bail bond, so she didn't hesitate.

"I took all the money that I had out of my bank account and then we all pitched in until we got $750 down payment together to get her out," Jannie told me over the phone earlier this year during one of many 4 p.m. calls—often the only hour she was available to speak.

But Jannie didn't want to give Fred Frank her bank details.

"I didn't have no dang on money in the bank anyway!" she says. "But that was still too much information."

Instead, she offered up her credit card from Avenue, a plus-size store where she likes to buy clothes for herself and gifts for her family. In addition to the down payment, "I just gave them that card and that was it," she says, unaware that if, ultimately, she had a judgment against her for the debt, her bank account could be accessed and drained anyway, by court order.

Tiffany and Hazel put a couple grand toward the debt, and for awhile, Jannie was making monthly payments of $100 on the remaining $6,750 they owed. "I just tried to pay what I could pay," she says.

Jannie works full time at a printing company for $12.65 an hour. She has held down that job for 30 years, and she was living with her mother for a while to save money. But when her mother got sick, she missed a couple of payments, and when she stopped receiving reminders in the mail to pay the installments, she wrongly assumed it was paid off.

The next piece of mail she received about the debt was from the bail bondsman's lawyer, and a court summons. Surprised, she went down to Fred Frank Bail Bonds: "They told me this happens all the time—the people that get locked up, they say they're gonna pay it, but then they don't pay it, and it gets stuck on the family," with all co-signers 100 percent responsible for 100 percent of the debt.

Jannie's confusion about the agreement is a common problem among MVLS' clients, says Amy Hennen, the MVLS attorney who handled Jannie's case.

"I see this happen in all kinds of consumer collection cases, somebody is co-signing for a close friend or relative. The person benefiting says they will take care of it. And they don't," Hennen told me on a tightly-booked phone call between cases.

On Jannie's behalf, Hennen made a deal with the plaintiff for Jannie to pay $100 on a specified day each month, and convinced them to waive the attorney fees she would have owed.

"It was a blessing," Jannie says. "I was so happy that they were in the courtroom that day," she says of MVLS. "It's best to have a lawyer. It's intimidating when they start using these words you don't understand, and you don't know anything about the law."

She doesn't contest that she owes the debt, but it remains is still a significant burden. Jannie counts herself lucky that she's able to live with her mother: "It's really tough with my other bills. My mother is willing to accept what I can afford to give her. But if I was on my own, I wouldn't be able to do it at all."

Co-signing on credit is a common practice for student loans, apartment leases, or buying a car—but credit checks to secure these types of contracts are much more stringent than those on bail bonds, which employ relatively minimal financial checks and are often co-signed by low-income customers in Baltimore's poorest, mostly black neighborhoods. This disproportionate impact is at the center of a major bail reform fight in Maryland.

As of June of this year, a new rule signed by the Maryland Court of Appeals officially went into effect, making it mandatory for a judge to consider a defendant's financial situation before deciding whether to set a cash bail—as opposed to other conditions of pretrial release, like travel restrictions.

But the effort to nix cash bail as a default option, led by Maryland Attorney General Brian Frosh, was fought tooth and nail by the bail industry, which funneled $87,000 in lobbying dollars to undermine the new rules, more than any other year.

But without MVLS, Jannie's situation could have been much messier. Because she responded to her court summons, it led to the relatively simple conclusion of her case. In doing so, she also avoided a default judgment that could have drained her wages and bank account, impacted her credit, and become a public record. Through MVLS, she had access to a lawyer who negotiated a settlement, avoiding additional fees and interest—a game-changer for cash-strapped debtors.


No-Shows Lose By Default

MVLS can only assist defendants that show up to court—one of Hennen's biggest concerns is the vast majority of defendants that don't.

"A huge chunk of people on the affidavit docket don't end up showing up" for a slew of different reasons, she says. "Maybe it's the case they are marked as being served in the case but there's not actually good service. Maybe it's the case that they don't understand the process or they think there's nothing to contest."

And sometimes it's simple avoidance.

"You can't be arrested for owing a civil debt," she adds—making it easier to ignore the long-term financial consequences of ignoring a court summons.

During a break between dockets back in December, I met Judge Scurti in his chambers, which are decorated with posters from his favorite Broadway musicals—conversation pieces, he tells me, to make guests feel at ease. But that's as personal as it gets.

He peered down onto Fayette Street where flags were being raised around the War Memorial for Catherine Pugh's Mayoral Inauguration later that day. As a judge, "I can't go to anything like that," he told me, stressing that he is strictly forbidden from attending political events, and from advocating or giving any legal advice. But he does gather statistics on trends in his courtroom.

Among those who have been notified of a court date and did not mail in a notice of intent to defend themselves as required under court rules, "[t]he statistics show approximately 15-20 percent of people will show up on average," he told me. And for those that do, "We encourage people to please, talk to a lawyer. Talk to the self-help center."

"People get overwhelmed. They get overwhelmed with information. They're served with papers. They may not understand what this means. Some of this is avoidance—if I avoid it long enough it'll go away. But it doesn't always go away," he says.

For that chunk of defendants who don't file notice of intent to defend and don't show up, the automatic judgment against them becomes a searchable court record and a factor in a credit score, and it gives the plaintiff the right to garnish 25 percent of their wages, 100 percent of their bank account, and the right to charge 10 percent annual interest on that debt.

While most defendants don't contest that they owe a debt, most are in dire need of a manageable settlement—and while part of Judge Scurti's job is to weed out illegitimate collection cases, there is no substitute for an advocate, says Hennen. "For Ms. Hamond," for example, "it was a matter of getting a result that they could not have gotten on their own," she says.

Still, swathes of debt collection cases nationwide have proven entirely faulty.

Federal Action

To remedy this, the Consumer Financial Protection Bureau (CFPB), set up in the wake of the 2008 financial crisis, has returned $12 billion in restitution to consumers, and has taken aim at the debt collection industry for cynical practices that bank on wage garnishment and interest from debtors who default.

In September 2015, the CFPB, which has been roundly criticized by the Trump administration and Congressional Republicans, took action against Delaware-based Encore Capital Group—one of the biggest such companies in the world—and Portfolio Recovery Associates, forcing the nation's two largest debt buyers to refund millions to consumers and overhaul their practices. The CFPB had found that the companies, both of which operate in Maryland, "attempted to collect debts that they knew, or should have known, were inaccurate or could not legally be enforced. . . The companies also filed lawsuits against consumers without having the intent to prove many of the debts, winning the vast majority of the lawsuits by default when consumers failed to defend themselves."

In its most recent quarterly SEC filings, Encore Capital indicates they are looking forward to expanding their operations, which involve purchasing "defaulted consumer receivables at deep discounts," to India. But on any given day in Baltimore, it's likely that several people on the affidavit docket are being sued by its subsidiary, Midland Funding LLC.

In January and February 2017, Midland filed something approaching 3,000 cases in the District Court in Maryland. Between them, the largest debt buyers in Maryland—Midland Funding, LLC, Portfolio Recovery Associates, and LVNV Funding—are the most prolific District Court filers of any kind.

As of 2014, Maryland has tightened laws to protect consumers from deceptive debt collection practices, placing a heavier burden on creditors to prove that a debt is owed. "In that sense it's improved," says Emanwel Turnbull, a lawyer whose practice focuses on defending consumers from debt collectors and who has volunteered with MVLS and the Pro Bono Resource Center. "But it's still a sausage machine," he tells me. "If you're filing thousands of cases within a couple of months, it's kind of inevitable that some of them are going to be duds, and it's the duds that are the problem."

Take the case of Sunni Ber, who received a letter last year from his credit card company asking for missed payments on one of his cards, threatening to garnish his wages.

Sitting in his living room in North Baltimore, Ber, who is on permanent disability, shuffles through his credit card paperwork while watching daytime game shows on two TVs at once, a daily routine. "While one's on commercial break, I watch the other," he tells me as he pads around his living room looking for credit card statements to show me. He admits that he ignored the late payment notices for a few months—he'd paid above the minimum for several months prior, and thought he might catch a break. He then got a court summons saying that he was now being sued by Midland Funding LLC.

Knowing little about who he was up against, Ber showed up to his court date with $150 in cash to pay toward the $600 he owed—"to show my intention to pay," he tells me. He came to court making the common but incorrect assumption that he would meet his accuser there, and make a deal to pay off the rest. Hennen reviewed his file that day: Ber had been threatened with wage garnishment, Hennen explained, but when she looked through his file, she noticed his permanent disability income—a type of Social Security that, unbeknownst to Ber, is immune from garnishment, despite the threats he had received in the mail.

After years of working as a laborer for a baking company, during which he sustained chronic back pain that led to surgery, Ber was approved for permanent disability status. He now earns $750 monthly fixed income, and is not legally allowed to work for wages in addition to that. He admits that, on such a low income, the temptation of easy credit can be irresistible. He holds three credit cards, with a monthly credit limit that exceeds his income by some way. He often finds himself paying one credit card off with another. This allows his credit limits to slowly creep up while his income remains constant—and he knows it's a risky game. When he needs the money, he uses it, and keeps a close eye on his bills, he says. But it's the emergencies that catch him out.

It's a common cycle, he says: "Soon as you get ahead, or you think you get ahead, here comes something else. Hospital. Something go wrong with the car. Or somebody else gets sick, things of that nature. Then here comes another bill. Here comes a birthday, here comes a holiday. In order not to neglect those things, you take care of them. Realizing that you also got an obligation, because you did sign on the dotted line" and agree to pay.

When Ber received the court summons, he made a point to show up and settle it.

As soon as Hennen got her hands on the case, it took just a couple of phone calls from the District Court library for MVLS to inform Midland of the error. Knowing that under his Social Security, they would never be able to collect from him, Midland dropped the case, forgiving Ber's debt entirely—a result for which he counts himself lucky. But the garnishment threats were nonetheless erroneous, which Ber did not know until MVLS looked at his case.

In a courtroom where almost no defendants bring legal representation, and none are entitled to it, most mornings volunteers are the only lawyers in the courtroom. Clinics like MVLS's help fill a need that any legal expert in court will tell you is dire.

While Judge Scurti can't offer advice from the bench, he strongly recommends that defendants in his courtroom take advantage of the MVLS lawyers. But there aren't nearly enough of them.

In a climate where fewer than 60 percent of law school graduates have full-time jobs requiring bar qualification, and many leave law school with six-figure debts, new lawyers often flock to high-paid corporate jobs.

This dynamic has landed the United States in 94th place in the world for the accessibility and affordability of civil justice, according to the World Justice Project 2016 report.

Recruiting volunteers is a slog that requires vigilance and innovation. The number of cases MVLS takes on in a given day depends on how many attorneys are on hand, and it's never as many as they'd like. At the moment, MVLS averages two to three attorneys each Tuesday at the affidavit clinic in Baltimore, but to reach its goal of serving every defendant who shows up, they need closer to 10, and are seeking out new innovations to entice new volunteers—even turning to virtual reality as a training tool.

At a March Madness-themed fundraiser for MVLS earlier this year, players in the Baltimore legal scene enjoyed a mac and cheese bar, tours of the Ravens' locker room, and an open bar. But their PR consultant was after new volunteers. Andrea Martin toured a banquet hall full of lawyers at M&T Bank Stadium with a Google Cardboard headset, placing it on as many faces as she could. In an effort to recruit more volunteers, MVLS's resident technology whiz, Matthew Stubenberg, built the virtual reality training tool using inexpensive Google Cardboard headsets, simulating the pro bono experience to train courtroom-shy volunteers and to encourage new lawyers to join up.

Last year, MVLS served over 10,000 clients through a network of volunteer attorneys with day jobs in private practice, corporations, and government. But that's not enough to cope with the number of cases in play.

For Hennen and the MVLS team, their goal to provide legal services for all affidavit defendants is akin to drinking from a firehose, but to remedy the courtroom experience will take more than a windfall of volunteers.

"Having more attorneys to give legal advice to everyone who shows up wouldn't solve the confusion with the process," she says. Defendants need to not fear or avoid their cases, and to resolve that larger problem "would involve a greater overarching look at what can be done to improve the lives of citizens."

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