State-Level Government Debt Collection Outsourcing Expanding

A growing number of states are expanding their relationships with private collection agencies to settle long-overdue court debts, according to a piece published this weekend in USA Today. The article focuses on the increasing reliance on private debt collectors to chase delinquent fees and fines levied by court systems across the U.S.

The USA Today piece cites at least a half-dozen states that have passed laws recently in their legislatures that allow for contracts between private debt collectors and court systems, and have increased their outsourcing under those new provisions. The main driver for the partnerships is simple demand.

In New Jersey, for example, there are some 511,301 eligible cases for collection, totaling more than $246 million.

The story stands in stark contrast to recent editorials and investigative reports in media outlets exposing the practices of bad check aversion programs at the local district attorney level. While a separate issue, the outsourcing of bad check collection is at least tangentially related to court fee outsourcing.

Like in the coverage of check aversion programs, government officials involved in court debt collection are very pleased with the returns they are seeing using private debt collectors.

“It has been very successful,” a spokeswoman for the Arizona Supreme Court’s Administrative Office of the Courts told USA Today about her state’s court debt collection program.