Iowa court-debt amnesty program brings in at least $2 million

At least 12,700 people have taken advantage of a first-ever court-debt amnesty program in Iowa to pay more than $2 million in outstanding court fines or fees that they owed the state, officials said today (Nov. 30).

And, those figures are likely to go higher because they were the tally through last Wednesday, but the final deadline to pay up continued through Tuesday (Nov. 30), said Roger Stirler, a spokesman for the Iowa Department of Revenue – the state agency that oversaw the amnesty program.

“Our phones lines had always been relatively steady with calls, but they were almost overloaded (Monday, Nov. 29). We had a lot of people calling saying I'm ready to pay,” Stirler said. “We are expecting a bit of a spike” when the final numbers are tabulated.

Overall, about 246,000 people who owed outstanding debt of about $213 million in court fines, fees and costs that were more than four years old were eligible for the program that was established by the Legislature and signed by Gov. Chet Culver as part of a comprehensive effort to recoup money owed by scofflaws. Under the amnesty program that ends today, debtors who paid 50 percent of their overdue fines and fees in one lump sum had their remaining debt forgiven without being subject to legal action.

Between 1 percent and 2 percent of the people who had overdue debt came forward, Stirler said, which was similar to the response of past income tax amnesty programs that were administered by the state revenue agency.

“We consider it to be about what we expected,” he said. “Two million dollars is not all the debt by any means, but it is a lot of money that we've collected. It's also given these people some ability to restart their lives. A lot of these folks were not eligible to get a car registered in their name because they owed these debts and so now they would be able to go out and do that kind of thing and hopefully get out into the job market better.

“We think it will do some things for individuals personally as well as collect some money for the state,” he added.

The largest payment the state received was for more than $10,000, which represented debt that topped $20,000, Stirler said. However, most of the payments were for small amounts, he added.

Because a large share of the owed debt dates back a number of years, it was difficult to reach people with mailings offering them debt amnesty, Stirler said. “Obviously, a lot of those (notices) came back because people just moved on and we weren't able to find them. Also, there are some of the people who just don't have the money.”

The amnesty program did not include delinquent restitution, child support, alimony, sheriff fees, room and board fees, fines payable to cities or counties, and civil penalties or reinstatement fees assessed by the state Department of Transportation. Also, people who were in jail or prison or under supervised probation or parole were not eligible; nor were debtors who were making payments through the state revenue agency's centralized collection unit or a county attorney office.

During the legislation debate, some lawmakers were concerned that the amnesty program might send the wrong signal to people that it was in their best interest not to pay so they would be eligible for a reduced sum later. Stirler said the key to avoiding that perception would be “that we not repeat this very soon,” noting that tax amnesty programs usually aren't offered again for 15 years or 20 years “because you don't want to put that idea in people's heads that it's OK not to pay at all.”

Since Iowa was the first state to offer a court debt amnesty program, Stirler expected that other states likely would be contacting Iowa officials once the final numbers are tabulated and an assessment report has been written to determine “whether we thought it was worthwhile or not.”