California Needs $7.5 billion in Court-Ordered Debt to be Collected

The state of California has about $7.5 billion in court-ordered fines and fees sitting around just waiting to be collected, according to an article from investigative journalism group California Watch.

The debt is owed to California for various fees, fines, and penalties imposed by courts for everything from traffic violations to criminal offenses. The state’s court system is currently exploring options for collecting the money.

But by law, the job of collecting court-ordered debt falls to individual counties. The counties have latitude to decide how to approach debt collection. One county, Shasta, is so aggressive it handles the debt collection for five other nearby counties. And some use private collection agencies to pursue the debtors.

The piece noted that an attorney representing private collectors had brought up that possibility at the last meeting of the Judicial Council, the policymaking group for California state courts, as he implored the Council to create incentives for counties to deal with their debt collection issues.

Consumer advocates argue that much of the debt is probably uncollectible and should be written off. But California Watch said that their analysis of the court system’s debt data shows that the total has increased by $2 billion since the 2008-09 fiscal year, meaning much of the debt is not old.

The story presents an opportunity for ARM firms specializing in government debt collection. Because each county deals with its debt collection individually, a strong business development plan could reap rewards in the Golden State.

Read the full piece on the California Watch web site.

Related: For more information on government debt collection, check out insideARM.com’s Local, State, and Federal Government Debt Collection Report.