
Zombie debts are hounding struggling Americans - rwmj
https://www.theguardian.com/law/2019/oct/15/zombie-debt-benefits-overpayment-poverty
======
teilo
This is ripe for a lawsuit. Not only should the statute of limitations apply
to all of this debt, but confiscating independently earned money from your
children is a modern version of holding one's children responsible for the
sins of their parents — a defacto caste system.

~~~
prepend
Suing the government is very hard [0].

There are many flaws in the US Tort system, but it at least incentivizes law
firms to create class action suits to fix stuff like this article describes
when private entities are the ones doing the behavior we want to change.

When it’s the government, these types of class action suits are rare, I think.

A better attempted solution would be to write to congresspeople.

Cynically, I would try to find some globocorp that could benefit from having
this function privatized. At least then there would be a regulator and two
different orgs to argue.

[0] [https://www.wikihow.com/Sue-the-Federal-
Government](https://www.wikihow.com/Sue-the-Federal-Government)

~~~
beerandt
Class action suits against the US government (or states) are rare because even
if the plaintiff class wins, the government still has to volunteer to pay (in
most cases). Sometimes it even requires the legislature budgeting the funds
for payment.

Since class action lawyers generally rely on the proceeds of the lawsuit to
collect expenses plus ~35% of the proceeds as their fee, it's highly risky for
them to take such a case.

Additionally, since the cases in the article are to essentially prevent a debt
collection, even if the lawyers win, there isn't necessarily going to be a
payout, just an injunction.

One way to handle these situations is to eliminate administrative courts. Two,
the government should have to sue to recover money from individuals as any
other entity would have to do.

That being said, the article admits that in at least one of the cases, the
lady was making payments on what I assume was a legitimate debt, then abruptly
stopped. She was surprised to find out she still owed the remainder some years
later. That's on her.

But it also makes me question the extent of the problem. If one of the 3 most
sympathetic cases that they chose to write about isn't even an illegitimate
debt.

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djsumdog
Government services are suppose to help people. When States are staving for
cash, how can this possibly make up the difference? Surely getting all these
elderly or working poor people for a couple thousand here or there (trivial
for the government and the well off or middle class; disastrous for those on
fixed incomes) cannot even hope to clear the cost of the State workers and
contractors hired to do the collections work and handling the bullshit appeal
process (even if it is just rubber stamping things).

This is the problem: the State is turning to the enemy of the poor in the US,
and if you crunched the numbers, they're probably not even earning that much
off these people. It's fucked up.

~~~
grawprog
>This is the problem: the State is turning to the enemy of the poor in the US,
and if you crunched the numbers, they're probably not even earning that much
off these people. It's fucked up.

I honestly can't see how it can even be about money when you have government
agencies stripping drivers licenses and vocational certificates from people
for defaulting on student loan payments. At that point, the government's
taking away their ability to work and earn an income in response to them not
paying a debt. How is somebody, who likely couldn't pay it before, supposed to
pay anything back when you take away their ability to actually earn a wage?

~~~
Ancalagon
Because as with all legal matters in the US, it is about punishment, not
rehabilitation.

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cryptofits
"Government violates the Fair Debt Collection Practices Act and harasses
seniors for debts that are outside the statute of limitations" FTFY

~~~
Mountain_Skies
Sounds like the government is exempt so they're not violating the letter of
the law but certainly are violating the spirit of the law.

~~~
beerandt
The law prohibits aggressively collecting expired debts. Government debts
don't expire. I'd say that's still within the spirit.

------
kgwxd
If it hasn't already, this will be used for the next round of phone scams.

------
Excel_Wizard
Statute of limitations should apply in situations like this. It's really weird
that it doesn't.

~~~
Clubber
Even the Statute of Limitations is gone in the US. Companies can sue you in
court for debt right before the limit is up and your debt limitations has just
increased 20 years. They also tack on interest. Someone I know had $4K debt
that ballooned to $25K due to this tactic. The original debt is from 1997 and
this person is still on the hook.

It's all corrupt.

[https://creditcards.usnews.com/articles/what-happens-when-
yo...](https://creditcards.usnews.com/articles/what-happens-when-your-credit-
card-company-sues-you)

~~~
mytailorisrich
> _Companies can sue you in court for debt right before the limit is up_

Nothing wrong with that. The point of any statute of limitations is to prevent
action _after_ a period has elapsed, with the full range of remedies available
before that.

Edit: why the downvotes?

Clearly many posters here do not know what a statute of limitations means, and
assume it means something it doesn't.

Obviously this depends on the jurisdiction, but in general, and as mentioned,
it puts a limit on how long one has to sue.

But if a lawsuit is started right before the limit then obviously the limit
does not apply and the lawsuit and any court order will stand.

Nothing new here. This is how it is meant to work. Don't shoot the messenger.

~~~
Clubber
It doesn't really jibe with the word, "limitation," if you can constantly
increase it leveraging the court system.

~~~
mytailorisrich
That's exactly what 'limitation' means. It means no action after a certain
period. That's how it works everywhere.

~~~
danaris
From what the earlier poster is saying, the companies are getting around that
by filing a lawsuit just before that period would expire. Then they not only
get to collect on the debt for however long they can draw out the lawsuit for,
_they get to collect interest as well, as if the statute of limitations never
existed_.

~~~
mytailorisrich
They are not getting around anything. As explained this is the way it is
intended: As long as you _begin_ legal action before the deadline then indeed
the statute of limitations does not apply at all (mileage may vary by
jurisdiction).

A statute of limitations is not aimed at helping people wriggling out of
paying what they owe (among other things). It is aimed at putting a reasonable
time limit on taking legal action.

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undefined3840
Does anyone know what law governs ISAs? Like why would a Lambda school be able
to forcibly collect income if a student tried to vanish without paying if they
found a job?

~~~
gnode
They're contracts, so generally contract law. Although such contracts would
have to be careful to not run afoul of employment laws, or laws against
slavery.

It seems income sharing agreements typically include clauses which mitigate
their risk of becoming invalid as voluntary slavery, such as limited time, a
minimum income threshold, and buyout options. They could also be structured as
a debt, with a payment structure based on income. Potentially bankruptcy law
would affect their interpretation also.

~~~
undefined3840
Interesting. Yeah seems like a legal gray area. I could see one bad Supreme
Court case turn them on it’s head.

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selimthegrim
"And then, in December 2010, the Claims Resolution Act passed. This historic
piece of legislation settled an unresolved court case in favor of 75,000 black
farmers unjustly denied agricultural loans in the 1980s and 1990s. Ironically,
tucked into its 801st section was a provision to increase the “collection of
past-due, legally enforceable state debts”. It quietly expanded which debts
could be referred to Treasury, from only those due to fraud to those resulting
from unintentional errors."

How the (#$*) did Obama let that get out of the first committee reading
(Warren wasn't elected yet)?

~~~
kian
Because he was never the poor man's savior that everyone made him out to be?

