Debtor's Purgatory 

People who can't afford to hire an attorney have virtually no chance in court against well-heeled lawyers for banks and debt collection companies.

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In fact, Ryan added, a debtor might have a perfectly solid defense, but not know how to use it. For example, if someone steals a person's identity and fraudulently uses her credit card, and then the bank sues her for payment, that person might not realize — without the help of an attorney — that she can quickly win the case if the debt collector put a wrong name on the complaint, harassed her employer, or lost the bill of sale to prove it actually owned the debt.

Because Cache, Midland, and Portfolio all know the game a little better, it's extremely easy to prey on self-representing litigants, Ryan said. "Once a person can't answer the debt, then the debt collector can move forward — put a lien on the property, [ask for] wage garnishment, collect the judgment, and begin enforcing it," she said. What's worse, the collector will then lock the debtor into an unaffordable payment plan — say, $300 a month for a janitor who only makes a $1,200 monthly salary and has to support a family. "That's what drives me crazy as an attorney," she said. "People are really eager to settle because they don't want to be in court, but then they work out a plan that [far exceeds] their financial circumstances."

Attorneys at Mandarich Law Group, which represents Cache, declined to speak on their client's behalf. Spokespeople at Portfolio didn't answer requests for comment. Spokespeople at Encore Capital Group, which owns Midland, punted questions to their corporate communications director Julie Reynolds. She said in an email that Encore prefers to make "affordable, flexible payment arrangements," and pointed to Encore's Consumer Bill of Rights, which promises to "promote settlement" and exercise "the fair and reasonable use of litigation."

The East Bay Community Law Center is currently pushing a bill in the state Senate — called the Fair Debt Buyers Practices Act — that would heighten standards for collection agencies to show they properly own a debt. Still, Ryan said, these agencies may always have the upper hand. Fighting against them is tough; winning is "highly unusual."

Judge Austin is keenly aware of how that game plays out in court. And he empathizes with the people who stream through his doors everyday, citing laws they found on the Internet and looking befuddled when the lawyers start speaking to each other in Latin.

Raised in a blue collar section of San Jose, right at the time that the now-vaunted Silicon Valley was transitioning from orchards to paved-over sidewalks, Austin is known in Contra Costa as a common man's judge — and sort of a local folk hero. His mother was a school secretary, his father worked on the production line at Hewlett-Packard, he was a jock in high school and got admitted to UCLA on a swimming scholarship. His bailiff describes him as "a good dude."

Austin has had a varied career on the bench, from presiding over drunken driving court to handling murder trials, family law cases, business contract disputes, and high-stakes personal injury verdicts. In 2003, he awarded $28 million to a diver who'd broken his neck in a public swimming pool, which wound up being the highest injury award ever in Contra Costa County. The judge has a natural predilection for complex civil cases, but these days, he said, they're fewer and far between. Civil law has instead become a laboratory of hard luck and social disparities. Austin said the number of debt collections on his calendar far exceeds the number of spats between corporate competitors. He spends several mornings a week entering judgment against the little guy.

Most debt collection court hearings are over in ten or fifteen minutes, quick enough to burn through half a dozen in the course of a single morning. In most instances, the debtor gazes pleadingly at Austin, but fails to present an oral argument. Austin listens to the well-paid lawyers on the plaintiff's side, reviews copies of old bills, asks if the defendant has considered filing for bankruptcy. "Okay, well, I'm going to have to enter judgment on this one," he said at least six times in the course of a morning.

And sometimes the steady trail of pro per cases winnows its way into Austin's afternoon calendar, as it did on a recent Thursday. Four such cases awaited the judge when he sat down at the dais at 1:30, overlooking what appeared to be a starkly bifurcated courtroom. On one side sat a group of attorneys in cleanly tailored jackets and ties; on the other sat a loose collection of borrowers and defaulters. A middle-aged man arrived with his translator in tow. A mother clutched her six-year-old son's hand. An older couple sat quietly in back.

Austin called the court into session and read a short litany of charges against a Latino man, Mr. Gomez, as he shuffled up to the stand. Gomez had owed $5,491.26 to Bank of America at the time he stopped making payments in 2009, and since then he'd accrued an additional two thousand dollars in unpaid interest and attorneys' fees, putting him $7,265.76 in arrears by the spring of 2013. He was unemployed and working spotty part-time gigs that didn't quite make ends meet. He listened to the bank's declaration without flinching.

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