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University of Wisconsin–Madison
Poverty-related issues in the news, from the Institute for Research on Poverty

Debt Collection and the Poor

  • Chicago hiked the cost of vehicle city sticker violations to boost revenue. But it’s driven more low-income, black motorists into debt., By Melissa Sanchez and Elliott Ramos, July 26, 2018, ProPublica Illinois: “During negotiations for Chicago’s 2012 budget, newly elected Mayor Rahm Emanuel and then-City Clerk Susana Mendoza agreed to hike the price of what was already one of the priciest tickets vehicle owners can get in the city. Citations for not having a required vehicle sticker rose from $120 to $200. The increase, approved unanimously by the City Council, was pitched by Mendoza as an alternative to raising the price of stickers as well as generating much-needed revenue from ‘scofflaws…'”
  • IRS outsources debt collection to private firms, and the poor feel the sting, watchdog charges, By Jeff Stein, July 23, 2018, Washington Post: “Private tax collectors acting on the Internal Revenue Service’s behalf have collected tax payments from more than 5,000 poor people in the past year, payments that an in-house IRS watchdog says should have been avoided. Nina E. Olson, head of the Office of the Taxpayer Advocate, says a private debt collections program is not doing enough to spare people struggling to pay for food and shelter from additional drains on their income. She has also urged the IRS to stop referring to the private companies cases of individuals whose incomes put them below 250 percent of the poverty line…”