Capital One

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<div style="font-size: small; background-color: rgb(255, 255, 255);">=</div><div style="font-size: small; background-color: rgb(255, 255, 255);"><a href="https://www.alternet.org/2020/10/debt-collectors-have-made-a-fortune-this-year-now-theyre-coming-for-more/" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">https://www.alternet.org/2020/10/debt-collectors-have-made-a-fortune-this-year-now-theyre-coming-for-more/</a></div><div style="font-size: small; background-color: rgb(255, 255, 255);">
</div><div style="font-size: small;">Earlier this year, the pandemic swept across the country, killing 100,000 Americans by the spring, shuttering businesses and schools, and forcing people into their homes. It was a great time to be a debt collector.In August, Encore Capital, the largest debt buyer in the country, announced that it had doubled its previous record for earnings in a quarter. It primarily had the CARES Act to thank: The bill delivered hundreds of billions of dollars worth of stimulus checks and bulked-up unemployment benefits to Americans, while easing pressures on them by halting foreclosures, evictions and student loan payments. There was no ban on collections of old credit card bills, Encore's specialty.At the same time, the pandemic compelled households to cut spending. Finding themselves with enough money to settle old debts, people responded to collectors' calls and letters. Debt-buying executives couldn't help marveling at their good fortune. All this created “a perfect storm from a cash perspective," the CEO of Portfolio Recovery Associates, Encore's main competitor, told Wall Street analysts.After its record second quarter, analysts expect Encore to blow past $200 million in profit this year and reward stockholders with 40% earnings growth compared with last year. Portfolio Recovery is set for similar growth. The share prices of both have soared off their early April lows.Investors didn't even show much concern when, in early September, the Consumer Financial Protection Bureau <a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-debt-collectors-and-debt-buyers-encore-capital-group-et-al" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;" /><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-debt-collectors-and-debt-buyers-encore-capital-group-et-al" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">sued Encore,</a><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-debt-collectors-and-debt-buyers-encore-capital-group-et-al" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;"> saying that it had broken the terms of a consent agreement struck in 2015. </a><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-debt-collectors-and-debt-buyers-encore-capital-group-et-al" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">The agency had previously charged the company with “pressuring consumers with false statements and churning out lawsuits using robo-signed court documents," as it </a><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-the-two-largest-debt-buyers-for-using-deceptive-tactics-to-collect-bad-debts" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">said at the time. (In </a><a href="https://encorecapital.gcs-web.com/node/17156/pdf" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">a statement</a>, Encore said the CFPB's recent suit was unnecessary because it had fixed the alleged problems “years ago.")In recent months, the only real bad news for debt buyers was that local courts across the country temporarily shut down. Debt collection lawsuits provide a key source of revenue for the companies, a way to extract payment from consumers, typically low-income, who don't offer it up.But now even that hiccup is over. After a bit of a lull in the spring, Encore and other debt buyers are back at it, filing suits by the thousands every week, according to ProPublica's analysis of state court filings.In August alone, Encore filed about 1,000 suits in Indiana and over 2,000 suits in the metro Atlanta area. Other debt buyers jumped back in as well. In Chicago, Portfolio Recovery filed over 3,000 suits in July, while LVNV, a major debt buyer privately owned by Sherman Financial Group, filed over 2,700 suits in Maryland in August. For all these companies, ProPublica found, the volume was well above the number they'd filed before the coronavirus arrived, in January or February of this year. No national numbers on suits exist.In statements, the companies said they have been actively working with consumers during the COVID-19 pandemic and only sue as a last resort on a small portion of accounts.Elizabeth A. Kersey, a spokesperson for Portfolio Recovery, said the company's hardship program “allows for the suspension of collection efforts for ninety (90) days upon notification of a hardship event." The company is currently not seeking new orders to seize debtors' wages or bank account funds, she said.Ryan Bell, an Encore executive, said, “We have consistently and proactively communicated to consumers the various relief options we've put in place in response to COVID-19, including temporarily stopping collections." The company said it had stopped seeking orders to garnish bank accounts. It is, however, seizing wages.Sherman Financial did not respond to requests for comment.If Congress is unable to pass any further stimulus , unemployment is likely to remain high. In that scenario, debt buying companies and the banks that sell defaulted accounts to them expect more Americans to fall behind on their credit card bills over the coming months.Even that scenario turns out to be rosy for the debt buyers. While good times can mean that Encore collects on more debt than it expected, bad times typically bring a glut of people suffering under loans they cannot repay. The result is that Encore can scoop up the raw materials for its profit machine — defaulted accounts — more cheaply. Or as Encore CEO Ashish Masih put it to Wall Street: The company is “particularly excited about the prospects for increased supply in the future."“The same giant debt buyers known for fighting consumer protection laws at every turn have been raking in cash during this pandemic," Sen. Elizabeth Warren, D-Mass, told ProPublica. “They are now licking their chops in anticipation of profiting even more off families who have their hours further cut or can't find a job, and can't keep up with their bills or their mortgage. This is disgraceful and reinforces the need for Congress to protect consumers and small businesses from this predatory behavior."In recent years, Encore has bought around 2 million to 3 million U.S. accounts per year, according to public filings. Last year, on average, the company paid 8.6 cents on the dollar for each account. For a typical debt of $3,142, Encore paid $271.To earn a profit on that investment, Encore and other debt buyers pursue debtors in near perpetuity. Encore is still collecting tens of millions of dollars each year from debts it bought in 2009 or earlier. The key to that persistence is the courts.Since the early 2000s, debt buyers have <a href="https://www.propublica.org/article/so-sue-them-what-weve-learned-about-the-debt-collection-lawsuit-machine" style="text-decoration-line: none; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">flooded local courts nationwide with suits</a>. The companies regularly account for more than a quarter of all debt collection cases in a given jurisdiction, according to ProPublica's review of collection filings over several states.That disproportionate presence has been particularly apparent in recent months, as the banks themselves have mostly opted to suspend filing new suits. In normal times, <a href="https://www.propublica.org/article/at-capital-one-easy-credit-and-abundant-lawsuits" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">Capital One files far more lawsuits than other banks</a>, in numbers similar to those filed by Encore and Portfolio Recovery. But since March, although Capital One <a href="https://www.propublica.org/article/capital-one-and-other-debt-collectors-are-still-coming-for-millions-of-americans" style="text-decoration-line: none; font-weight: bold; color: rgb(0, 51, 153); outline: none; opacity: 1; transition: color 0.25s ease 0s, background 0.25s ease 0s, opacity 0.25s ease 0s;">continued to seize pay via garnishments secured before COVID-19 struck</a>, it has largely stopped filing new suits.ProPublica did find one exception among the major banks that commonly file a significant number of suits: Citigroup, which resumed filing suits at its normal levels in July. The bank, for instance, filed over 200 suits in Oklahoma in August, more than it had filed there in January and February combined.In a statement, Citi spokesperson Jennifer Bombardier said the bank has a special assistance program for customers impacted by COVID-19 and that it is not seeking to garnish the bank accounts of customers it has sued. The bank also did not sell charged-off accounts to debt buyers “for up to 120 days" in the states “most impacted by COVID-19," she said....</div>===
millions of Americans live with the possibility that, at any moment,

their wages or the cash in their bank accounts could be seized over an

old debt. It’s an easily ignored part of America’s financial system, in

part due to a common attitude that people who don’t pay their debts

deserve what’s coming to them.

A couple of years ago, we set out to find out more about the growing

use of the courts to collect consumer debts. How many lawsuits are

filed? Who is filing them? Who is getting sued?

    
    </font><div class="callout-ad ad" id="google-callout">
        
    </div><p><font face="Times New Roman" size="4">The suits are filed in state and local courts, and many

states rely on antiquated systems or only keep data at the county level.

We ultimately collected what details we could from a variety of states

and large, urban counties. Then, we wrote <a href="http://www.propublica.org/series/unforgiven">a series of stories</a> sharing what we found:

<ul><li><a href="https://www.propublica.org/article/unseen-toll-wages-of-millions-seized-to-pay-past-debts">Four million Americans had their wages garnished over consumer debts in 2013</a>, and workers earning between $15,000 and $40,000 a year were the most

        likely to experience a garnishment.</font></li><li><font face="Times New Roman" size="4"><a href="https://www.propublica.org/article/debt-collection-lawsuits-squeeze-black-neighborhoods">Black communities are hit much harder by debt collection lawsuits</a> than white ones, even in places where black households and white households have
        similar incomes.</font></li><li><font face="Times New Roman" size="4">One subprime lender with stores nationwide was <a href="https://www.propublica.org/article/thank-you-for-your-service-how-one-company-sues-soldiers-worldwide">seizing pay from active-duty soldiers</a> when they fell behind on overpriced loans. (The
        company subsequently <a href="https://www.propublica.org/article/company-that-sued-soldiers-closes-its-stores">went out of business</a>.)</font></li><li><font face="Times New Roman" size="4">Some <a href="https://www.propublica.org/article/in-alabama-a-public-hospital-serves-the-poor-with-lawsuits">public</a> and <a href="https://www.propublica.org/article/how-nonprofit-hospitals-are-seizing-patients-wages">nonprofit hospitals use the courts to collect from patients who can’t pay their bills</a>,
        even when those patients obviously qualify for financial assistance.</font></li><li><font face="Times New Roman" size="4"><span style="background-color: rgb(255, 255, 102);"><a href="https://www.propublica.org/article/at-capital-one-easy-credit-and-abundant-lawsuits">Capital One sues its customers way more than any other bank</a> and filed an enormous number of suits during the 2007–2009 recession.</span></font></li></ul><font face="Times New Roman" size="4">

But there’s a lot more to understand about the rise of this legal

tactic — one that continues to alarm judges who see it firsthand.

“It seems to me that over the years I’ve become less of an authentic

arbiter of disputes and more a processor of paperwork,” said Steven

McMurry, a justice of the peace in Phoenix, Arizona, who has been

presiding over such cases since 1998. “The thing

    that gets me so upset, I see all these cases and I question whether

there might be some valid defense.”

Here are other important lessons we’ve learned:

<h2>Debt Buyers Are Primarily Responsible for the Rise in Lawsuits</h2>

So, what’s changed to trigger these suits? The most important

difference since the late 90’s is relatively simple: the emergence of

debt buying. Take New Jersey for example
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https://www.propublica.org/article/at-capital-one-easy-credit-and-abundant-lawsuits

co-published with <a href="http://www.thedailybeast.com/articles/2015/12/28/capital-one-files-disturbing-number-of-lawsuits-against-its-cardholders.html">The Daily Beast</a>.

       
    
    
    
        
    
        </font><p><font face="Times New Roman" size="4">Several years ago, Capital One gave Oscar Parsons, 46, his

first credit card. At the time, he didn’t need a loan. But he banked at a

Capital One branch near his Bronx apartment, and when it was offered,

he thought, “Why not?”

Initially, he had little problem keeping up with the payments. But

after a run of construction jobs came to an end, he fell behind and

found himself ducking the bank’s collections calls, he said. Each time

the company’s TV commercials popped up, asking, “What’s in your wallet?”

Parsons thought: “It’s not enough to pay you back.”

    
    </font><div class="callout-ad ad" id="google-callout">
        
    </div><p><font face="Times New Roman" size="4">This year, Capital One provided Parsons with another first:

his first lawsuit. For failing to pay his $1,800 debt, the company took

him to court. Currently on public benefits and in a job training

program, Parsons has nothing Capital One can take. But should Parsons

find work, Capital One could use a court judgment to seize money from

his bank account or take a portion of his wages.

It was a hard lesson — one learned by hundreds of thousands of the

bank’s cardholders. No lender sues more of its customers than Capital

One, according to ProPublica’s review of state court data.

Over the past year, ProPublica has sought to illuminate the scope of

debt collection lawsuits, which, though they are often filed by public

companies in public courts, are a largely hidden part of the nation’s

financial life. The suits <a href="http://www.propublica.org/article/unseen-toll-wages-of-millions-seized-to-pay-past-debts/">hit workers who earn below $40,000 a year the hardest</a> and <a href="https://www.propublica.org/article/old-debts-fresh-pain-weak-laws-offer-debtors-little-protection">federal garnishment laws provide scant protection</a>.

Even workers near the minimum wage could have a quarter of their

take-home pay taken or their bank accounts cleaned out. State laws

typically offer little more protection.

To identify which companies file the most collection suits,

ProPublica obtained and analyzed court data from 11 states. In every

state, Capital One stood out.

During the years of the recession, particularly 2008 through 2010,

when the number of credit card defaults surged, many banks filed more

lawsuits. But Capital One dwarfed them all, reaching levels never

matched by any company before or since, according to ProPublica’s review

of data going back to 1996.

By our estimate, the suits exceeded half a million per year nationally during those peak years.

Since 2011, Capital One’s suits have dropped considerably, though

they have continued to far exceed the totals of any other bank. For

example, in Indiana counties for which court data is available — home to

about two-thirds of the state’s population — the bank filed about 3,360

suits in 2014. That’s about a quarter of the suits Capital One filed in

2010, but still more suits than all other national banks combined in

In Clark County, Nevada, which includes Las Vegas, Capital One’s

suits comprised about 40 percent of all suits by major banks. In

Miami-Dade County, Florida, the tally was about the same.

        <h2><font face="Times New Roman" size="4">Lawsuits by Major Banks in Las Vegas, Nevada (2000–2014)</font></h2>
        <p class="dek"><font face="Times New Roman" size="4">Capital One began filing a large volume of suits

in Clark County (which includes Las Vegas) starting in 2005. The suits

reached their peak in the years around the Great Recession. In 2009

alone, Capital One filed about 10,000 suits. Since 2011, the bank’s

suits have declined and numbered 1,119 in 2014.

        <div class="axis"><div class="bank"><font face="Times New Roman" size="4">Capital One</font></div><div class="bank"><font face="Times New Roman" size="4">Citi</font></div><div class="bank"><font face="Times New Roman" size="4">Discover</font></div><div class="bank"><font face="Times New Roman" size="4">FIA Card / Bank of America</font></div><div class="bank"><font face="Times New Roman" size="4">American Express</font></div><div class="bank"><font face="Times New Roman" size="4">Household - Beneficial - HSBC</font></div><div class="bank"><font face="Times New Roman" size="4">Wells Fargo</font></div><div class="bank"><font face="Times New Roman" size="4">HSBC</font></div><div class="bank"><font face="Times New Roman" size="4">GE</font></div><div class="bank"><font face="Times New Roman" size="4">Monogram Credit - GE</font></div><div class="bank"><font face="Times New Roman" size="4">Providian National Bank</font></div><div class="bank"><font face="Times New Roman" size="4">Barclays</font></div><div class="bank"><font face="Times New Roman" size="4">JPMorgan Chase</font></div><div class="bank"><font face="Times New Roman" size="4">US Bank</font></div><div class="bank"><font face="Times New Roman" size="4">CitiFinancial / OneMain</font></div><div class="bank"><font face="Times New Roman" size="4">Direct Merchants - HSBC</font></div><div class="bank"><font face="Times New Roman" size="4">TD Bank</font></div></div>
        <div class="chart"><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 56,054</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 15,579</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 14,666</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 8,832</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 7,054</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 4,233</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 4,164</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 2,709</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 2,198</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 1,669</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 1,457</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 1,200</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 1,010</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 838</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 700</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 274</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 221</span></font> </div></div>
          <div class="legend">
            <div class="crisis"><font face="Times New Roman" size="4">Suits Filed 2008–2010</font></div>
            <div class="others"><font face="Times New Roman" size="4">All Other Years Combined</font></div>
          </div>
          <figcaption><font face="Times New Roman" size="4">Note: Data shows suits filed in Las Vegas Justice Court and Clark County District Court.</font></figcaption><font face="Times New Roman" size="4">
          </font><figcaption><font face="Times New Roman" size="4">Source: County court records, ProPublica analysis.</font></figcaption>

</div>

Because court data is often kept at the county level, ProPublica

combined data to compile numbers for entire states when possible,

including New Jersey and Missouri. In some states, data was limited to

major metropolitan counties. The time periods also varied, from a couple

decades to only a few years, but the trends involving Capital One’s

suits were consistent.

The suits, often over debts as small as $1,000, reveal a largely

hidden side of Capital One’s business. The bank has only the fourth

largest credit card portfolio (as measured by both numbers of

cardholders and balance size), but such a large portion of its cards are

held by those with poor credit that it is the country’s largest

subprime lender. With those loans comes a high risk of default, and the

company is particularly aggressive at recouping losses.

Capital One’s subprime borrowers live life on the edge, said Steve

Brobeck, executive director of the Consumer Federation of America. “A

large majority of these cardholders carry balances from month-to-month,”

he said, because they can’t afford to pay off the balance.

The “disturbing” volume of suits filed by Capital One should prompt

regulators to investigate whether the perils of subprime credit cards

outweigh the benefits, Brobeck said.

A Capital One spokeswoman said the bank serves an important function

by providing credit to large numbers of borrowers who might be unlikely

to get it from other banks. When customers fall behind on payments, she

said, the bank makes every effort to work with them.

“We will not sue anyone working with us, no matter how small the

payment,” said spokeswoman Tatiana Stead. But when customers don’t pay,

she said, “we have an obligation to recover some of our losses so we can

offer the best pricing to our customers.”

Capital One’s suits are notable not just for how common they are. The

company also files suits over much smaller debts than other banks.

In 2013, the typical debt in a Capital One suit filed in New Jersey

was about $1,500, according to ProPublica’s analysis of state court

data. The typical debt in a suit brought by other major issuers like

Citibank or Bank of America was more than three times as high.

ProPublica found a similar gap in other states.

Capital One offers cards with a credit line often as low as a few

hundred dollars to customers with poor credit. On the bank’s website,

the cards carry annual interest rates as high as 25 percent. After

making payments for five months, customers’ credit limits can increase.

      <h2><font face="Times New Roman" size="4">New Jersey Court Judgments From Suits By Major Banks (1996–2011)</font></h2>
      <p class="dek"><font face="Times New Roman" size="4">Capital One began filing a large volume of suits in

New Jersey starting in 2000. The suits reached their peak in the years

around the Great Recession, particularly 2008–2010. In 2009 alone,

Capital One obtained over 41,000 court judgments.

      <div class="axis"><div class="bank"><font face="Times New Roman" size="4">Capital One</font></div><div class="bank"><font face="Times New Roman" size="4">Discover</font></div><div class="bank"><font face="Times New Roman" size="4">Citi</font></div><div class="bank"><font face="Times New Roman" size="4">JPMorgan Chase</font></div><div class="bank"><font face="Times New Roman" size="4">FIA Card / Bank of America</font></div><div class="bank"><font face="Times New Roman" size="4">GE</font></div><div class="bank"><font face="Times New Roman" size="4">Household - Beneficial - HSBC</font></div><div class="bank"><font face="Times New Roman" size="4">American Express</font></div><div class="bank"><font face="Times New Roman" size="4">Monogram Credit - GE</font></div><div class="bank"><font face="Times New Roman" size="4">HSBC</font></div><div class="bank"><font face="Times New Roman" size="4">Bank One - FCC National</font></div><div class="bank"><font face="Times New Roman" size="4">Providian National Bank</font></div><div class="bank"><font face="Times New Roman" size="4">CitiFinancial / OneMain</font></div><div class="bank"><font face="Times New Roman" size="4">TD Bank</font></div><div class="bank"><font face="Times New Roman" size="4">Direct Merchants - HSBC</font></div><div class="bank"><font face="Times New Roman" size="4">Barclays</font></div></div>
      <div class="chart"><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 277,366</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 60,102</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 37,081</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 37,407</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 25,761</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 15,226</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 16,618</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 13,438</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 11,104</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 8,960</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 8,330</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 8,123</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 4,789</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 1,687</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 1,516</span></font> </div><div style="width:100%;" class="row">  <font face="Times New Roman" size="4"><span class="label"> 289</span></font> </div></div>
        <div class="legend">
          <div class="crisis"><font face="Times New Roman" size="4">Judgments 2008–2010</font></div>
          <div class="others"><font face="Times New Roman" size="4">All Other Years Combined</font></div>
        </div>

<figcaption>Note: Data shows judgments obtained through suits filed in New Jersey’s Special Civil Part.</figcaption>

<figcaption>Source: State court records, ProPublica analysis.</figcaption>

</div>

Kevin Thomas, an attorney with the nonprofit New York Legal

Assistance Group, often represents clients sued in Bronx Civil Court by

Capital One. He said his clients frequently started with low-limit

cards, but after Capital One raised their credit limits, their balances

grew, the interest mounted and they lost control. Then, although their

debts were not large, typically between $1,000 and $1,500, they ended up

in court, he said.

<a href="http://www.propublica.org/article/debt-collection-lawsuits-squeeze-black-neighborhoods/">Debt collection lawsuits are especially prevalent in black neighborhoods</a>,

as ProPublica reported in October, where suits over smaller debts are

more common. Capital One obtained judgments in mostly black

neighborhoods at nearly twice the rate as in mostly white neighborhoods,

a larger disparity than the other major card issuers, we found. Capital

One’s spokeswoman said the bank did not take race into consideration

when making a loan or filing a suit.

Lawsuits over even small debts can provoke a crisis for low-income

debtors. Patricia Boglin, 51, of Woodbridge, Virginia, works as a school

bus driver, earning about $26,000 a year. When Capital One sued her

over a $1,878 debt late last year, she said, she panicked. Would the

bank try to foreclose on her house to force repayment? “It just

terrified me,” she said.

That a collection lawsuit could lead to foreclosure is a common fear

among defendants, said Jay Speer, executive director of the nonprofit

Virginia Poverty Law Center, even though it’s extremely unlikely. Of

course, the realistic consequences of a suit — garnishment or a lien

being placed on the debtor’s home — are serious.
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