Courts inundated as many struggle with rising debts
Unemployment and underemployment has generated a substantial increase in the number of people summoned to court for debt collection.Increasingly those summoned are simply unable to pay as opposed to unwilling to pay after a judgement has been obtained.And court sources confirmed that “people are taking much longer to pay off their judgement debts”.As a result, they are being brought back to court on enforcement proceedings more frequently to determine how or when their debts will be paid.On the one hand are those owed the debts, “primarily out of desperation or frustration, are compelled to take steps to enforce their judgement”.While on the other hand there are “debtors who cannot pay versus the plaintiff who needs the debt paid to resolve their own dire financial situation”.The court handles an average of 150 to 200 cases a week at various stages in the process, twice a week. The majority of cases are debt collections for rent, utilities, hospital and phone bills.One source said: “It’s not unusual for someone to be ordered to pay less than $100 a month on a debt which exceeds $5,000.“The court has been very responsive to those who are genuinely unemployed. Quite often payment schedules ordered are commensurate with the debtor’s reduced income.”The day before Cup Match there was standing room only with “no sign of it letting up”.People were literally piled up in the corridor with the courtroom door open to hear their names called.And there was no shortage of defendants in the same court again last week.A pastor, who asked not to be named was there at a church member’s side as well to avoid the threat of incarceration for non-payment.He put up $1,500 in cash towards the member’s bill and the defendant was subsequently ordered to pay $100 a month to clear the balance.“He has been struggling to find work and finally he has found a job,” said the pastor.The money donated by the church represented “a significant portion of the overall bill”.He estimates it will take the young man a couple of years to pay off the entire bill that stems from a combination of housing and other debts.The church has an extensive welfare programme to help people in need. Members only seek help as a last resort when unable to provide basic essentials.But there has been a substantial increase in the number of people falling behind on their financial commitments.“I have been on the Island for 13 years, up until three years ago we very rarely had anyone approach the church for assistance,” he said.“I get the feeling that more people are grappling with hard times than people actually know or think about really.”Recently, he said: “The church has helped more members then they have for the past 20 years combined.”Surprised by the number of people in court that day he said it was his first time.“In the Church of Jesus Christ of Latter Day Saints we are taught that we should strive to live within our means and to avoid debt.“Seeing the amount of people that were going before the court and then speaking to our member showed me why the Lord wants us to avoid debt.”Another woman appeared for hospital debt collection orders on four different matters. Currently serving a prison sentence on another matter, her case will be reviewed again in February; a month before her release date from prison.Slapped with a legal bill for a divorce by his ex-wife, another man agreed to pay $100 a month on the $1,800 bill as of Friday.After the hearing he said: “I’m struggling to keep up on his mortgage payments and other bills.“Everybody’s coming at me all at once and it’s difficult to keep up because I’m fighting off the ropes.“I’ve only been working full-time for about two months; I’m doing the best I can.”A 25-year-old single mother agreed to pay $50 a month on a hospital bill for Emergency Ward treatment four years ago. Unemployed at the time, she had no health insurance. Ironically, she said: “I used to work for a debt collector and now I finally have a job working at the hospital.”Right after her case the judge issued a committal warrant for a man who failed to appear on a $300 hospital bill.Another single mother appeared to contest a nursery school bill incurred when she was made redundant. She admitted that her account was in arrears for a few weeks. But she insisted the bill had already been paid. Unable find the receipt she complained that the bank charges a sizeable fee to review accounts.Acting Magistrate Susan Moore-Williams advised it would be in her best interest to pay the fee since she’s the one contesting the bill.
In January, the head of Bermuda’s Civil Court said social issues like this present one of the biggest threats to the social fabric of this community.
Magistrate Juan Wolffe was commenting on the big rise in the number of cases against people unable to pay their bills.
Featured in an extensive news series, he said up to 4,500 cases go through his court annually — about 75 percent of them for debt collection.
And he expressed concern that, in light of unemployment and other economic factors, the situation was getting worse.
“I find people are coming with genuine problems. They’re unemployed, they’ve been laid off and prices have skyrocketed.
“They genuinely cannot pay their bills and the court has to respond, I think, to that reality,” he said.
“You cannot squeeze blood out of a stone but at the same time you have to balance the interests of both parties — not only the judgment debtor, but also the judgment creditor.”
But he said more often than not committal to prison for non-compliance with a court order to pay up “is rare”.
Only in “the most extreme circumstances such as persistent non-compliance” does a debtor go to jail.
During the course of last year he also dealt with at least ten cases where people had lost their homes. Said Mr Wolffe: “It’s certainly a blow to their dignity to have to come to court owing money.
“In many cases they owe thousands of dollars they cannot pay because they lost their job or their hours have been reduced drastically.
“It’s a very humiliating situation and I think the courts have to respond to that reality.”
