Iowans in a third of the state’s 99 counties are paying much more to satisfy overdue court debt than those in other parts of the state, a problem deepening poverty for thousands, Iowa legal experts say.

Thirty-three counties — including several that are home to the state's poorest residents, such as Appanoose and Decatur — defer collections to a private firm hired by Iowa’s judicial system, generating a host of complaints.

That Texas-based firm, Linebarger, Goggan, Blair & Sampson, specializes in the collection of delinquent accounts on behalf of governments around the country, charging add-on fees for overdue tickets, back taxes and unpaid tolls.

The firm collected $13.3 million in overdue court debt in 2017, according to Iowa's judicial system.

Linebarger charges Iowans a 25 percent fee, the maximum allowed under state law, to collect those debts. If someone pays $1,000 toward overdue restitution, for example, $250 would go to the firm and $750 would go to the crime victim.

Those fees deeply trouble lawyers who already are concerned about mounting court debt for thousands of Iowans.

Between 2000 and 2016, that debt ballooned from $200 million to more than $680 million, according to the Iowa Legislative Services Agency.

Often, legal experts say, poor defendants rack up far bigger debts because they cannot afford to pay attorneys’ fees up front or bail themselves out of jail.

“Effectively, it’s a poor tax,” said Phil Brown, who the American Civil Liberties Union of Iowa hired this year to investigate and document problems related to court debt in Iowa.

In Iowa, court-appointed attorneys and public defenders almost never come free of charge and rarely have a cap on what their clients might owe, Iowa's ACLU points out.

Unlike most states, Iowa allows defendants to be charged the full cost of their public defender.

"Legal fees are one major area where people tend to amass thousands and even tens of thousands of dollars in court debt," Brown said.

Those who cannot repay their debts can be subject to wage garnishment and other penalties. Thousands of Iowans also have been held in contempt and been jailed for failing to pay.

Such “modern-day debtor’s prison” practices have been held unconstitutional by the U.S. Supreme Court as a violation of equal protection.

Alex Kornya, assistant litigation director at Iowa Legal Aid, said Linebarger's collections shot up in 2016 when its lawyers began more routinely garnishing wages as part of its collections.

“Linebarger is by far and away the largest of these kinds of firms nationally,” he said. “But this an issue that communities in every state are wrestling with right now.”

Privatizing collections

Scott McGlasson, a partner at Linebarger, said the firm supports the ACLU's look at overdue court debt, which he said has been a problem affecting Americans across the country.

"We strive to protect all the rights of individuals, while at the same time diligently representing our clients," McGlasson said.

Linebarger's 25 percent fee in Iowa is in the low- to mid-range of what's charged across the country, he said.

Iowa law does allow the firm to be paid a contingency fee, he said, but the add-on charge is negotiable.

Before 2015, Iowa's centralized collection unit used to perform much of the work of overdue collections, receiving a 10 percent fee.

A deal made on the final day of the 2015 legislative session privatized some collection efforts by the state. Linebarger landed the initial contract, which is now month to month.

But in 2016, after complaints were raised to Reader's Watchdog and state legislators, the Legislature changed state law to encourage more collections by county attorneys.

“Obviously, we had a concern with who ended up with the contract, but the county attorneys had no control over that,” said Tom Ferguson, executive director of the Iowa County Attorneys Association.

Iowans typically pay court fines and costs at their county clerk of court. Some set up payment plans at the discretion of the clerk.

Under state law, restitution to crime victims is supposed to be paid first.

But once the debts — restitution, criminal fines, law enforcement surcharges, court costs, attorney and correctional fees — are 30 days old, they become eligible for collection.

Today, 66 county attorney offices across the state, including Polk and all the state’s other largest counties, have collection programs for debt more than 30 days old, about 16 more than in 2015.

Linebarger collects in 33 counties.

“Our hope now is to have every county have a county attorney collection program,” Ferguson said.

Contract questioned

In the past several years, Linebarger employees have faced widespread complaints about their collection tactics and hefty charges and even been the subject of allegations of bribing government officials.

Gail Sheridan Lucht, an administrative law judge for Iowa’s Department of Corrections, said she made a complaint to Iowa’s attorney general and the Better Business Bureau after the firm sent her two letters about her son's unpaid tolls from Colorado.

“We got a letter saying we owed, but I never got a copy of the ticket,” she said. “I called the number right away, but I could never get through. The whole thing was very odd. It ended up being a lot of time over a very small amount of money."

Lucht said the firm didn’t respond to her consumer-protection complaint to the attorney general and provided only a two-line response to her Better Business Bureau complaint.

The Better Business Bureau has said the firm has generated a pattern of complaints in which consumers allege they’ve been hassled about debts for which they are not responsible or weren't aware, or ones that Linebarger is unable to substantiate.

The firm, meanwhile, has responded publicly, saying it provides documentation for all debts being collected and it records calls to assure professional behavior by its employees.

Joe Householder, a consultant hired by the firm, told Watchdog in 2015 that the benefit of Iowa’s contract is that the state gets 100 percent of a delinquent debt collected and taxpayers are not responsible for the cost of collection.

But Ferguson, the head of the Iowa County Attorneys Association, said the debt-collection programs run by county attorneys are paying for themselves.

The programs also provide for county attorneys to keep more of the proceeds from their collections once they reach certain thresholds based on the size of the county.

Some smaller counties have entered into joint programs to make county attorney collections more cost-effective.

Ferguson said in Black Hawk County, where he was county attorney, crime victims have received more in restitution, the sheriff has received more in reimbursement for room and board at the jail, and the county attorney’s office also received greater proceeds.

“Payments to the county decreased 20 percent, but it still received $600,000 to offset property taxes,” he said.

Growing court cost debt

Ferguson said the main reason court debt has grown so much is that it stays on the books for 65 years, regardless of the person’s ability to pay.

“Most businesses would write it off sooner,” he said.

While some Iowa judges properly conduct “reasonable ability to pay” hearings and limit the amount that defendants are expected to repay, others fail to do so.

Part of the ACLU of Iowa’s yearlong research will include identifying jurisdictions with high rates of contempt convictions, and investigating whether a reasonable-ability-to-pay hearing was provided.

By the end of 2017, Iowa is likely to have convicted more than 1,000 people of contempt because they didn't pay enough against their fines and court costs, Brown said.

Brown, an attorney and legal fellow, said he will be collecting personal stories from Iowans affected by court debt. He’ll also be assessing data available from Iowa courts and law enforcement agencies to document the problem.

He then will propose reforms and likely changes to Iowa laws.

Lee Rood's Reader's Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Contact her atlrood@dmreg.com, 515-284-8549 on Twitter @leerood or at Facebook.com/readerswatchdog.