Financial Inequality and Legal Consequence

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Many states utilize “poverty penalties”—piling on additional late fees, payment plan fees, and interest when individuals are unable to pay all their debts at once, often enriching private debt collectors in the process. Some of the collection fees are exorbitant. Alabama charges a 30 percent collection fee, and Florida allows private debt collectors to tack on a 40 percent surcharge to the underlying debt.

Two-thirds of people detained in jails report annual incomes under $12,000 prior to arrest. Predictably, most ex-offenders find themselves unable to pay the many fees, costs, and fines associated with their imprisonment, as well as their child-support debts (which continue to accumulate while a person is incarcerated). As a result, many ex-offenders have their paychecks garnished. Federal law provides that a child-support enforcement officer can garnish up to 65 percent of an individual’s wages for child support. On top of that, probation officers in most states can require that an individual dedicate 35 percent of his or her income toward the payment of fines, fees, surcharges, and restitution charged by numerous agencies. Accordingly, a former inmate living at or below the poverty level can be charged by four or five departments at once and can be required to surrender 100 percent of his or her earnings. As a New York Times editorial soberly observed, “People caught in this impossible predicament are less likely to seek regular employment, making them even more susceptible to criminal relapse.”

The New Jim Crow by Michelle Alexander

 

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