A Utah Bar Foundation report highlighted the challenges debtors face navigating the Utah legal system and recommended changes to streamline and balance the process.
Some six decades ago, author and activist James Baldwin wrote, “Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.” This is no less true today.
A recent report broke down how Utah’s legal system is exacerbating the obstacles faced by our neighbors just trying to make their way through.
The Utah Bar Foundation study describes how those who are the subject of a debt collection or small claims lawsuit find themselves in a confusing and sometimes conflicting process, almost always without the help of an attorney — which makes sense when you think about it, then if you can’t afford rent, you won’t be able to hire a lawyer.
Those who contest the case – after attaching attorneys’ fees and interest – are often worse off than those who just don’t bother to show up and get a default judgment.
Half of the small claims cases in court are filed by just nine companies — all of them payday lenders.
But it’s Utah’s onerous eviction laws that really stand out. The report notes that Utah is one of only three states where renters are required to vacate a property within three days or face fines of three times the rent owed. Utah is the only state that makes these penalties mandatory, rather than allowing a judge some discretion.
And what are the results? Well, it means someone who’s evicted has just 72 hours to pack up and find an apartment — a tough task when Salt Lake County’s rental vacancy rate is below 2%. And that assumes someone who’s defaulted on their rent has the funds to make the necessary security deposit and the first month’s rent that most places charge.
Or, if they stay longer than three days, the landlord can collect three times the daily rent – again from someone who does not have the money to pay the rent.
If they end up in court, things can get even worse. The Utah Bar Foundation report finds that the average delinquency leading to an eviction was $640 in 2019. But when a case came to a verdict — because of the high claims for damages — the median verdict shot up to $4,070 in 26 days, the average time between evictions and verdict. And then, after all that, they get 24% interest until the judgment is paid.
In short, Utah makes it very, very expensive to be poor.
Every time I write about these issues, I get emails from landlords sharing their personal horror stories about ailing tenants — and I’m sure they exist, just like ailing landlords or lenders. It should also be noted that the eviction rate in Utah is low compared to neighboring states.
But there will always be people who lose their jobs, or have an unexpected medical crisis, or get caught in the payday loan maelstrom.
When that happens, we force people to navigate a complex and intimidating legal system, usually on their own, and impose harsh penalties on those who can least afford it.
In essence, we don’t throw a lifeline to people drowning in debt, we throw an anchor.
But maybe, just maybe, there’s hope for a change.
Two Utah House members, Rep. Marsha Judkins, R-Provo, and Rep. Gay Lynn Bennion, D-Cottonwood Heights, are forming a working group to explore ways to improve the system and provide better outcomes for all stakeholders.
The Bar Foundation offers several potential reforms, such as encouraging parties to engage in mediation in hopes of an out-of-court settlement; Focusing resources on rural parts of the state with some of the highest debt collection rates; simplifying the process to allow untrained parties to navigate without a lawyer; and to consider changing the way attorneys’ fees are awarded.
“I’ve known about these issues for two years, and I think the general public has been suffering from these issues for longer,” Bennion told me. “But I think this is a great report and I think we have the best hope of doing something good together.”
The working group will hold its first meeting next month and its efforts are worth watching. Getting people on the same page won’t be easy, but if they can, it could bring some degree of balance to our laws and lead to a streamlined process that focuses on fairness, not blaming people for it to punish them for being poor.
https://www.sltrib.com/news/homeprices/2022/05/25/utah-laws-are-stacked/ Utah’s laws are stacked against renters who are struggling to get by. Robert Gehrke explains why that could change.