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‘Frequent flyer’ debtors ‘playing the system’

Professional debtors play the legal system and exploit the reluctance of creditors to attend court in an attempt to avoid payment, it has been claimed.

Senior magistrate Juan Wolffe said only the prospect of prison could force some people to hand over the money they owed.

Mr Wolffe said prison was used only as a last resort but it still had a place as a deterrent for people who make repeated appearances in debt courts.

Mr Wolffe added: “There is a sector of persons who know the system, they know how it works.

“They know that they can get away with it for a certain period of time and not have to pay the money.

“We have persons in the courtroom who I call frequent flyers.

“We also have those who are, I will say, professionals at owing debts, so they actually will rack up debts, well knowing and hoping that the person who's owed the money will not come to court.

“For example, we have persons coming to court who will go from house to house to house, not paying any rent, and they tend to target certain persons who are vulnerable.

“They will go to a house, rack up say $10,000, $15,000, $25,000-worth of rent well knowing that the individual is not going to take them to court or is going to be very slow taking them to court, or that they just want to get them out of their house and not seek to get them incarcerated.”

Mr Wolffe said one debtor who owed back rent appeared in Magistrates' Court five times in a row, which meant an appearance every eight months to a year.

He saw a similar pattern with mobile phone bills, where customers swapped between communications firms Digicel and One, then got somebody else to sign a deal for them.

He added: “I personally think, of the thousands and thousands of persons I've seen come through the courts, that if you remove that ultimate consequence then you are going to have, I think, more delinquent behaviour.

“The only thing that people who are owed money really have is that consequence that the person may feel they might go to prison.

“If we don't have that, what does the court really have?”

Mr Wolffe said: “I don't call it a threat, I don't see it as being a threat.

“Obviously, we do let persons know that there are consequences if you do not abide by court orders and one of those consequences is, ultimately, incarceration.”

But he added: “There seems to be this conception that we are locking people up. Nothing could be further from the truth.

“We don't do that on a regular basis. Do we inform people that could be a consequence? Yes, most definitely we do that.”

Chris Swan, a lawyer who handles many debt cases, explained that people are not sent to prison for their debt, but for contempt of court if they breach a court order that set out agreed repayment rates.

He added that in most circumstances defendants agreed the amount to pay back and committal orders were not made if the individual proved they could not afford the payments.

Mr Wolffe said magistrates tried to “balance the interests” of plaintiffs owed money and those of the debtors.

He added: “If you owe money for a Belco bill or Digicel bill ... if a company's carrying a debt for people who owe money, then what do you think they're going to do?

“It will be passed on to the rest of us by increased costs so that they recover some of that money that they're probably not going to get.”

He added: “On the occasions when we have actually sent somebody to prison, on the odd occasion, it has been because it's the absolute last resort.

“It has been sometimes years. Multiple chances have been given to the individual to pay and they have wilfully neglected or refused to pay over a period of years.”

Mr Wolffe said the courts were “sympathetic and empathetic” to the reality of the cost of living in Bermuda.

But he added: “We have to draw the line somewhere, we cannot continuously give people breaks and them not show us that they are making any efforts.”

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Published October 08, 2018 at 9:00 am (Updated October 08, 2018 at 7:36 am)

‘Frequent flyer’ debtors ‘playing the system’

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