Hello and welcome back to MarketWatch’s Extra Credit column, a weekly look at the news through the lens of debt. This week, we’re taking a look at the intersection of consumer debt and the criminal justice system.
A novel approach with roots in Occupy Wall Street The Debt Collective’s novel approach to debt cancellation first brought them attention back in 2012. The group, which formed during Occupy Wall Street, realized that they could buy up loans on the secondary market, the sphere where debt buyers and creditors buy and sell portfolios of consumer debt for pennies on the dollar, and simply cancel it.
Though the cancellation efforts are focused on this specific type of debt, organizers say one of the goals of the initiative is to draw attention to all of the ways debt infiltrates a defendant’s experience from arrest to release. In most cases, the companies will require the defendant to have a co-signer on hook for the conditions of the bond contract, including ensuring the defendant shows up to court, being liable for the bail if the defendant doesn’t show up, and any payment plan. — Manuel Galindo, a carceral debt organizer with the Debt Collective The legacies of racism embedded in the criminal justice system have meant that low-income men of color and Black men in particular are more likely to get caught up in it.
Co-signers may believe that the only sum they’ll ever have to pay is the payment they make to initiate the payment plan. They sometimes think that if their loved one has the charges dropped, they won’t be on the hook for the rest of the contract, Page said. After Rodarmel graduated, she opened a clinic in the Bay Area to help consumers contest their bail debts and try to hold bail bond companies accountable to consumer protection laws. In the clinic, she kept hearing from co-signers who had agreed to bail someone out “and clearly did not understand what their legal obligation under that contract was.”
“When I first started sending demand letters about how these laws applied to them, their answer was always ‘no they don’t,’” she said. Still, “most of them pretty quickly and easily folded on the request to just discharge the debt.” Earlier this year, a California superior court judge granted a request from Caldwell to stop Bad Boy Bail Bonds from collecting or enforcing agreements signed by co-signers who were never provided the release. Bad Boy Bail Bonds is appealing the decision, which was stayed as part of the appeal proceedings.
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