Unpaid city fines going to collection agency

A new contract between Havre City Court and the Havre Credit Bureau is intended to give people with court fines an incentive to pay.

The contract, signed Monday after a month of negotiations, allows the credit bureau to be a collection agency for the city. It was pursued because city officials have complained that there are hundreds of thousands of dollars in unpaid fines and warrants owed to city.

City Judge Joyce Perszyk said the first batch of accounts will be sent to the Credit Bureau next week. She said she has a 28-page list of people who have not paid their fines.

"We'll be doing them slowly over the next couple of months," Perszyk said Tuesday. "We're trying to catch up with the backlog first and then go into the current accounts." She said she hopes that all of the backlogged accounts will be forwarded to the Credit Bureau by April, and then the court will send over accounts of people who were given fines in January.

Previously, people with fines had as much as five or six months to pay or work off the fine by doing community service before the court would issue an arrest warrant.

In January the court changed that. Offenders now have three months to pay their fines or work community service hours before their names are handed over to the collection bureau. They also face having their driver's licenses suspended by the state.

Brent Reber, owner of the Havre Credit Bureau, said today he believes the agreement will be good for both parties.

"I'm extremely confident," he said.

"There's going to be a certain number of accounts that are going to be resolved immediately," he said, while others will take longer.

After the court turns an account over to the bureau, the bureau will send the party an initial notice asking them to pay the amount and telling them they can come to the agency if they want proof of the debt.

If the person does not pay within 60 days, the account will be placed in their credit file, Reber said in a previous interview. That may prevent them from getting credit elsewhere.

"That's a very good incentive for people to get it taken care of because once it's in their credit file, it will stay in their credit file for up to seven years," he said.

With the court's approval, the bureau may settle an account for less than the actual amount owed to the court, the contract says.

The contract also states that if the bureau is unsuccessful collecting an account, the bureau can sue the debtor. The court agreed in the contract to provide a witness to testify and to provide documentation in the case of a lawsuit.

Reber said today it is fairly common that a debtor is sued, but that trials are rare because individuals usually settle before a case can go to trial.

The credit bureau will pay the court any money that it collects on the 20th of each month, according to the contract. The court will pay the bureau a commission of 25 percent on accounts more than $100 and 50 percent on accounts of less than $100.

Reber said the court received a discounted rate because the bureau recognized that the contract was a way to help out city government and prevent higher taxes and city fees.

"We put this contract together with the understanding that this is taxpayer dollars going back into the city coffers," he said. "Sitting down with all parties involved, we understand that every tax dollar saved for the city means a great benefit to the city."

The court may examine the bureau's records of its collection efforts on behalf of the city, the contract says.

The change in how City Court collects past-due fines could affect hundreds of people. Perszyk said the Havre Police Department issues about 4,000 tickets a year. About a quarter of the people serve jail time, and more than half end up with fines, she said.

No concrete statistics are available on how many people pay those fines, Perszyk said.

At last count, in August, there were about $143,000 in old unpaid fines, Perszyk said. About $106,000 more was owed the court under time-pay agreements. If those accounts have not been paid, they also will be sent to the bureau.

The contract is effective for six months from Feb. 23. Then it may be renewed.

In a previous interview, Reber said that nationwide, success rates of collection agencies range from 25 to 40 percent, depending on how long the original creditor waits before turning the account to a collection agency.