Municipalities in New Jersey Begin Using Private Debt Collectors

A town in Southern New Jersey recently signed a contract with a private debt collection agency to collect delinquent fines and fees for its municipal court, the first local government to do so since the state allowed the practice.

Bridgeton, N.J. will be using Duncan Solutions, of Wisconsin, to collect more than $3 million in outstanding fines. Courts in New Jersey were authorized by the state Supreme Court last year to contract with private collectors, and Bridgeton’s city court is the first, according to The News of Cumberland County.

“Having a back log of unpaid fines or easing down enforcement to avoid a back log is unacceptable,” Mayor Albert Kelly told the paper. “So the state has taken a page from the private sector, which routinely employs collections agencies for monies owed, and permits cities to use collections as another tool.”

In March 2011, the state finalized rules for local courts’ use of private collection agencies. Among other rules, fees paid to the collection agency are the responsibility of the debtor and are capped at 22 percent of the value of the debt.

Related Content:

• Local, State, and Federal Government Debt Collection Report