Prisoner's Debt

You all have heard of Debtor's Prison, but how many of you were aware of the fact that many convicts come out of prison with more financial debt than they can repay (and rarely is it dischargeable in bankruptcy).

The New York Times today brings light to this rarely discussed topic in an editorial today.

The scope of the ex-offender debt problem is outlined in a new study commissioned by the Justice Department’s Bureau of Justice Assistance and produced by the Council of State Governments’ Justice Center. The study, “Repaying Debts,” describes cases of newly released inmates who have been greeted with as much as $25,000 in debt the moment they step outside the prison gate. That’s a lot to owe for most people, but it can be insurmountable for ex-offenders who often have no assets and whose poor educations and criminal records prevent them from landing well-paying jobs.

...

A former inmate living at or even below the poverty level can be dunned by four or five departments at once — and can be required to surrender 100 percent of his or her earnings. People caught in this impossible predicament are less likely to seek regular employment, making them even more susceptible to criminal relapse.

Here are the proposed solutions as reported by the Times:

The Justice Center report recommends several important reforms. First, the states should make one agency responsible for collecting all debts from ex-offenders. That agency can then set payment priorities. The report also recommends that payments to the state for fines and fees be capped at 20 percent of income, except when the former inmate has sufficient assets to pay more. And in cases where the custodial parent agrees, the report urges states to consider modifying child support orders while the noncustodial parent is in prison. Once that parent is released, child support should be paid first.

The states should also develop incentives, including certificates of good conduct and waivers of fines, for ex-offenders who make good-faith efforts to make their payments. Where appropriate, they should be permitted to work off some of the debt through community service. Beyond that, elected officials who worry about recidivism need to understand that bleeding ex-offenders financially is a sure recipe for landing them back in jail.

Here is what bothers me about this aspect of the penal system: the people who need to pay hefty fines -- those that commit white collar crimes, for instance (for example: insider stock trading), rarely have to pay fines and restitution equal to the amount they stole, swindled or conned from their victims and many times they are quite capable of paying it (even though it may mean that trusts that they created to be exempt from creditors have to be "pierced").

This is another reform that needs to be addressed, in my opinion.