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Prosecutors team up with collection companies

People in financial straits around the country, including in Massachusetts, may face the embarrassment of accidentally writing a bad check. Honest people without a lot of savings write bad checks for many reasons, such as being involved in a divorce or simply writing a check on the wrong account. So it may shock many of these people to receive a letter from a local prosecutor threatening them with jail time if they do not both pay the check back and take an oftentimes expensive financial management class.

What these people might not realize is that the prosecutor has only loaned its letterhead to a private debt collection agency with no power of its own to prosecute a crime. Many times when these letters get sent, neither law enforcement nor the prosecutor has investigated to determine whether the bad check is evidence of an intentional crime or is instead a sign that an honest person without a lot of money made a mistake. However, those with legitimate debt relief needs may nonetheless simply pay both the check and the course fee out of fear that they may suddenly wind up in jail.

While critics of this practice may call it disingenuous and intimidating, its supporters claim that it frees up busy prosecutors to pursue more serious crimes and it saves taxpayers the cost the government incurs when it has to prosecute bad check crimes that often involve small amounts of money. Furthermore, supporters claim that the practice works, and merchants get paid the money they deserve.

For Massachusetts residents who may have accidentally overdrawn their checking accounts, bankruptcy may provide them with a fresh start. While a bankruptcy court would probably not discharge a bad check debt if the debtor was trying to defraud a merchant, an honest person who gets a threatening letter about a bad check may want to think about filing for bankruptcy protection, particularly if he or she has other financial difficulties. Because bankruptcy normally stops collection companies from pursuing debtors, a filing may return some emotional peace and closure.

Source: The New York Times, "In prosecutors, debt collectors find a partner," Jessica Silver-Greenburg, Sept. 15, 2012

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