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Marin City fathers find relief in debt reduction plan

Tino Wilson, a Black man and business owner from Larkspur, has been buried by child support payments for decades.

With three children: Julian, 31; Tino Jr., 19; and Malachi, 14; Wilson, 50, owed about $70,000 in child support to the state.

“It’s hard to get out from under it, but I had to try to do it,” Wilson said.

This year, the Phoenix Project, a Marin City-based advocacy and aid group, and the county Department of Child Support Services stepped into help, assisting Wilson with reducing his debt by about $30,000 and setting up a regular and more manageable payment plan.

“I felt stuck and couldn’t get anywhere,” he said. “But they are very, very helpful and they are working fast with me. There’s a whole lot of people like me getting help.”

The state’s debt reduction program aims to assist parents like Wilson, who have past-due child support payments owed to the government, called arrears. The money is owed if the children received public assistance or were in foster care when child support payments were not being made.

Federal law requires that the state be reimbursed for expending taxpayer dollars for supporting the children.

The problem, said Felecia Gaston, director of the Phoenix Project, is that these arrears become so staggering that working adults, especially Black men in Marin City, are unable to get out from under them. The debt owned to the state compounds at an interest rate of 10% a year, often causing the payments to be even further out of reach.

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LA County supervisors want to erase $2.6 billion in residents medical debt

Billions of dollars of medical debt owed by nearly a million Los Angeles County residents could be purchased by the county and retired, according to a proposal set in motion on Tuesday, Oct. 3.

The L.A. County Board of Supervisors voted 5-0 to explore a plan to purchase $2.6 billion in medical bills owed by people throughout the county for pennies on the dollar. If implemented, the action would relieve families of what can become a lifetime burden and often prevents them from seeking medical care.

“Medical debt can contribute to food insecurity and housing instability,” said Fourth District Supervisor and board chair Janice Hahn, co-author of the motion along with Second District Supervisor Holly Mitchell. “Once someone has medical debt it becomes a barrier to assessing their healthcare.”

Hahn said the motion is a way to address medical debt experienced by up to a million county residents. The process would cost the county only a fraction of the amount owed to buy the debt, then retire it, the county reported.

Here’s how it would work:

When people accumulate debt from unpaid medical bills, eventually hospitals and medical establishments sell the debt to for-profit collection agencies. If not paid, these agencies often win judgments in court that can result in liens on payroll and properties against the patients.

Los Angeles County intends to intervene by buying out the residents’ debt for pennies on the dollar.

The proposal could wipe out billions of dollars in medical debt at a cost to the county of only millions, Hahn explained. The potential cost to the county would be $24 million to retire $2 billion in medical debt spread over the next two to three years, according to the county Department of Public Health (DPH).

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Check’s in the mail — Riverside County residents encouraged to cash reimbursements from juvenile court fees settlement

Check’s in the mail — Riverside County residents encouraged to cash reimbursements from juvenile court fees settlement

What would you do with an extra couple hundred dollars? How about an extra thousand, or more?

These questions are a welcome reality for many Riverside County families that were recently reimbursed after being charged with illegal juvenile court fees, and they could be a life-altering reality for many more community members who are still eligible for refunds — but time is running out.

Any parent or guardian who paid juvenile detention fees to Riverside County from December 2016 to April 2020 is encouraged to check their mail for a refund check.

The reimbursements are the result of a June 2023 settlement in a class action lawsuit, Freeman v. County of Riverside, brought against the County by parents and guardians impacted by juvenile court fees. In the lawsuit, the plaintiffs — representing a class of some 1,200 people — alleged the County violated state and federal law when it charged millions of dollars in fees to families with children in juvenile detention, but failed both to ensure that families were able to pay the fees and to inform families of their right to challenge the fees. The plaintiff families are represented by the National Center for Youth Law and the Western Center on Law and Poverty. 

“We sincerely hope that all community members are able to access the money that is owed back to them,” said Hong Le, senior attorney with the National Center for Youth Law. “We’ve already seen the positive impacts these repayments have had on some class members. Everyone who was harmed by these illegal practices deserves this refund and to be able to use this money however they choose.”

Many checks remain uncashed

Riverside County, per the class-action settlement, agreed to pay $540,307 in refunds to class members. This came after the County agreed to stop collecting $4.1 million in outstanding juvenile detention and administrative fees following the filing of Freeman v. County of Riverside in March 2020.

More than $150,000 in reimbursement funds remain uncollected following the distribution of checks this summer. That money could be life-changing for many eligible recipients who may be unaware of their eligibility, which is why the National Center for Youth Law and the Western Center on Law and Poverty are recommending that community members check old mail they have lying around and that they encourage friends and family members who may have paid juvenile court fees to do the same.

Community members who have already cashed their checks have used the funds, among other ways, to get out of debt, to help with household bills, and to improve their living situations.

“If you think that you should have received a check, please call 833-472-1997 to see if you are eligible. The Settlement Administrator can reissue a check if it didn’t reach you. The settlement is the only case in the country where families are receiving refunds for fees charged to them when they had a child in the juvenile system. We don’t want any family to miss out on getting this money,” said Rebecca Miller, senior litigator with Western Center on Law and Poverty.

Visit here for more information about the lawsuit and settlement. Information from the Settlement Administrator can be accessed here.

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The National Center for Youth Law centers youth through research, community collaboration, impact litigation, and policy advocacy that fundamentally transforms our nation’s approach to education, health, immigration, foster care, and youth justice. Our vision is a world in which every child thrives and has a full and fair opportunity to achieve the future they envision for themselves. For more information, visit www.youthlaw.org.

Western Center on Law and Poverty fights in courts, cities, counties, and in the Capitol to secure housing, health care, and a strong safety net for Californians with low incomes, through the lens of economic and racial justice. For more information, visit www.wclp.org.

CalKids College Savings Account: a first step in building generational wealth

We are in a student debt crisis. Our national student debt stands at around 1.75 trillion dollars. President Biden proposed a policy last year in the fall that would cancel $10,000 for non-Pell grant recipients and $20,000 for Pell grant recipients that are low income. It has been met with legal challenge after legal challenge since it was proposed and has been paused and unpaused more times than my non-lawyer brain can process. While this plays out the racial wealth gap that many low-income Californians experience grows wider.  

Student debt and financial access to education are some of the many obstacles that communities of color face in our state. Student debt is a lifelong burden that impacts generational wealth. One study shows that after 20 years, Black borrowers still owe 95% of their original loans.  

Last Fall, California launched a program called the California Kids Investment and Development Savings program (CalKids) that will invest in low-income students by providing an initial seed deposit for them to save for college. 

All children born on or after July 1, 2022, can receive up to $100 in a college savings account. Additionally, eligible low-income public school students can receive up to $1,500 in a college savings account.  

With so many other trends happening with higher education this is positive news for low-income communities and communities of color.  

Many students rely heavily on loans to finance higher education due to sharp increases in costs for state and private universities. Whether it’s the culture of granting Wall Street size compensation to administrative positions like university presidents or the growing financial dependency of state universities on private donors rather than public funds, all these factors contribute to the priorities of higher education institutions.  

It’s long past time we focused on making higher education affordable and accessible to all. CalKids is a strong first step in addressing the financial barriers many low-income Californians face when deciding to pursue higher education and all its costs beyond tuition, like housing, food, textbooks, and more. No one should go into debt to get a degree.  

No Money, No Lawyer, No Justice

“Usually people on the other end of overpayment or overissuance claims don’t have attorneys to help, said Jessica Bartholow, a policy advocate at the Western Center on Law & Poverty. “That’s really appalling, because a public benefits fraud case can be enough to kick you out of the country if you’re an immigrant; they could go to jail; they could lose their kids if they go into Child Protective Services.” When people have lawyers, by contrast, “one out of two times” they can prove there was no overpayment at all.”

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PRESS RELEASE: Governor Signs Bill Stopping Debt Collectors From Draining Bank Accounts

FOR IMMEDIATE RELEASE

New law will protect low-income consumers from losing vital basic income to debt collectors

On Monday, Governor Gavin Newsom signed state senator Bob Wieckowski’s Senate Bill 616, capping a three-year effort by the anti-poverty groups, local governments and labor unions across the state to provide basic protections for the bank accounts of low-income consumers. The bill’s co-sponsors – the East Bay Community Law Center (EBCLC), the Western Center on Law & Poverty, and the California Low-Income Consumer Coalition – cheered the Governor’s signing of a measure that will automatically set aside $1,724 when a debt collector seizes a consumer’s bank account.

Sharon Djemal, director of EBCLC’s Consumer Justice Clinic, saw the need to elevate the issue of bank reform to the California legislature after fielding calls from hundreds of clients who lost the ability to cover food, rent, and basic expenses in one fell swoop. “We’ve fought for this reform for so many years because for too long, our clients were completely vulnerable to the whims of debt collectors. When their bank accounts are emptied, our clients are thrown into a financial tailspin – and sometimes even into homelessness.” Djemal added, “This bill is a significant step toward providing some basic financial stability to low-income Californians.”

“Legal services organizations around the state have long testified about the great harm of the debt-collector-take-all status quo,” said Jessica Bartholow of the Western Center on Law & Poverty, a co-sponsor of the bill. “Our clients miss rent payments, suffer bounced check and overdraft fees and, eventually, walk away from traditional banking altogether as a result of these levies. The governor’s signature on SB 616 will change that.”

The $1724 set aside by the bill is the amount the California Department of Social Services (DSS) has determined is the monthly minimum necessary for a family to survive. The DSS updates the amount every year.

“Other types of assets are protected under California law, from wages to jewelry to art. The one that isn’t – or wasn’t until today – is bank accounts,” noted Ted Mermin, director of the California Low-Income Consumer Coalition. “This bill will encourage low-income Californians to keep their money in the financial system rather than enduring the dangers of becoming ‘unbanked.”

The bill also gives consumers the chance to go to court to get back any seized money beyond the cap that they need in order to survive. Debt collectors currently time account seizures to occur when consumers have just been paid, or have just received their federal earned income tax credit. SB 616 will help to limit the damage that occurs when debt collectors game the system.

The bill offers crucial protections to workers like farmworkers and substitute teachers, who rely on their savings during the off-season. One EBCLC client, Grace A., a substitute teacher, had her account cleaned out at the beginning of the summer. With EBCLC’s help she convinced a judge that the money should not have been taken from her account. However, even though she “won” in court, her money was not returned for five months. In that time she had to borrow from her retired farmworker parents in order to pay her rent – all because of a bank levy that never should have happened, but was legal under existing law. SB 616 ends this practice and resolves the issue by exempting a minimum basic amount.

The bill’s sponsors express their enormous gratitude to Senator Wieckowski and his team, to co-authors Senator Bob Hertzberg and Assemblymember Luz Rivas, to floor supporters Assemblymembers Buffy Wicks, Shirley Weber, and Rob Bonta, and above all to their clients, whose bravery in speaking up and fighting back inspired the multi-year effort that led to the passage of this long-awaited, much-needed bill.

 

Contact: Jessica Bartholow; [email protected]