Even before law school, I became fascinated by what is sometimes called the “law of creditors and debtors.” This cat-and-mouse game between creditors and the people who owe them money was intellectually stimulating—and, I realized, terribly important. Even though the first year of law school focuses on liability, debt collection becomes all-important when judgment debtors cannot (or refuse to) pay. What I have begun to appreciate though, is that debt collection law is really a game of cat and mice. In our myopic focus on courts and parties, we have missed a group of people that I call redeemers. When I say redeemers, I am not referring to co-signors or guarantors; those people are legally obligated to repay. Instead, redeemers are third parties with a concrete, economic stake in seeing a debt repaid—for example, someone who would have to care for the debtor or the debtor’s dependents if the debtor became indigent. Redeemers are usually spouses, parents, and children, but they could also be voluntary associations like churches.
Now that I am focusing on this phenomenon (though I am not the first to see it), I think we should call this area the law of debtors, creditors, and redeemers. Debt collection activity aims to discover the debtor’s assets, induce the debtor to repay, and pressure redeemers to help. Take the historic example of debtors’ prisons, which I examined in State Bans on Debtors’ Prisons and Criminal Justice Debt and The New American Debtors’ Prisons. Before the practice was abolished in the mid-nineteenth century, why did American states allow creditors to imprison people for failure to pay civil debts? Some of it was to force debtors to cough up assets, but contemporaneous accounts also observe that the tactic helped convince a debtor’s family and friends to swoop to the rescue. In fact, the “Father of the Constitution,” James Madison, was a redeemer; he bailed his stepson out of a Philadelphia debtors’ prison in 1830. But this phenomenon is not buried in the past; ask lawyers working in this area today, and they will nod.
Now, I did not invent the term redemption. I am attempting to revive its use in debt collection law, but the word is of old vintage. The Hebrew Bible uses the term for a period during which a debtor or a family member could buy back land that had been sold under financial distress. We use it similarly in American law, under foreclosure law and the Bankruptcy Code. Still, even if American lawyers know what redemption is, we may have lost track of who redeemers are. Until recently, I thought of the redemption period as a time for the debtor to liquidate funds, borrow money, or get a job. But that is an unrealistic portrayal; if the debtor had access to money, they would have used it already. Instead, the redemption period primarily allows the debtor to get help from redeemers, whether through gifts or loans.
In a new article forthcoming in the Fordham Law Review, I analyze redeemers and what we can learn once we set the lens of our analysis wide enough to draw them into our picture of debt collection law. The first insight is that debt collection laws can create externalities. If a debtor becomes dependent on a redeemer or has dependents and can no longer provide for them, that debt collection activity has moved beyond the bilateral arrangement that initially formed the contract. Scholars like Seana Valentine Shiffrin, Eric Posner, Anne Fleming, and others have provided many reasons why we do not allow individuals to agree to just anything in their contracts, including why we do not allow them to agree to particularly cruel forms of self-help upon default. The theory of redeemers introduces new figures in the narrative that provide an especially compelling reason why we can limit debt collection activity without being paternalistic.
I think we abuse the role of the redeemer when we allow particularly harsh creditor “remedies” for civil debt, like imprisonment for debt, distraint, rushed eviction, or deportation. In the article, I dive into these draconian debt collection measures that persist today. Some of the tools and tactics of American creditors may surprise some readers. Consider, for example, the story of Samantha Conner. On a rainy day in Mississippi, a constable arrived at Mrs. Connor’s home to enforce an eviction judgment from the housing court, accompanied by the housing manager. Apart from forcing Mrs. Conner from the apartment, the constable also enforced the landlord’s lien of distress for rent, or distraint, which allowed the landlord to seize Mrs. Conner’s personal property to satisfy the judgment. According to Mrs. Conner’s complaint, that property included furniture, appliances, and jewelry, as well as items with no lawful resale value, like birth certificates, social security cards, and medical prescriptions.
Or take Mrs. Carter in Indiana, who was sentenced to serve thirty days in jail for a $110 housing debt. Carter was disabled, had three children, and had no property or income that could lawfully be seized to repay the debt under Indiana law. Even though the Indiana Constitution states that “there shall be no imprisonment for debt, except in case of fraud,” her landlord sought an order of garnishment, and the court ordered Mrs. Conner to pay $10 per month. When she could not pay, Grace Whitney Properties filed contempt motions every few months. The magistrate judge held Mrs. Conner in contempt of court, remarking that she could “purge herself of contempt” if she paid the $110 that she owed. As the courtroom deputy handcuffed Mrs. Conner, a stranger in the courtroom gave her $100 so that she could escape jail.
Or consider Holly Ondaan, a green card applicant from Guyana who was living in Queens when she fell behind on rent payments. “HAVE MY MONEY OR I’M CALLING ICES THAT DAY PERIOD,” texted the landlord, who made four calls to immigration authorities to figure out how to file a complaint. Similarly, Rogelio Gonzalez, an undocumented immigrant from Guatemala, reported poor and unsanitary conditions to the municipal government in Lynn, Massachusetts, and began withholding rent because of those conditions. The landlord began threatening to call ICE, and indeed, ICE agents arrived and arrested one of the tenants.
These examples lead to the second insight: it is hard to draw bright lines between which creditor threats should be permissible and which should be impermissible. How far should we let creditors go? Drawing the line at whether those threats are lawful begs the question, since we need a way to think about whether (and how) the law might be changed. And while the examples I described above are especially troubling, we should not try to eliminate redemption altogether. After all, reliance on community networks for financial support is not inherently bad. That said, the theory of redeemers gives us another reason to question whether credit is the best way to solve poverty, a point made by Professor Abbye Atkinson in an article called Rethinking Credit as Social Provision.
Drawing from the policies behind exemption and consumer protection laws, I think a guiding star should be to ensure that debt collection measures do not threaten to ruin a debtor so that they cannot provide for themselves or their dependents. Enforcing that line would allow redeemers to jump in only when they want to. While we should expect and welcome private acts of charity, giving creditors too many devastating tools turns acts of grace into acts of compulsion. I include much more in the article than I can cover in short form here, especially about how we can enforce the line I am advocating for. For instance, I introduce the concept of “redeemer torts,” under which a redeemer might be able to sue a creditor directly for claims like extortion or abuse of process. I also argue that under the U.S. Supreme Court’s “history and tradition” jurisprudence, imprisonment for civil debt violates the Fourteenth Amendment—even after Dobbs v. Jackson Women’s Health Organization. While we have a long way to go in reforming the law of creditors, debtors, and redeemers, understanding the scope of the problem is the first step.
Christopher D. Hampson is an Assistant Professor of Law at the University of Florida Levin College of Law.
This post is adapted from “Harsh Creditor Remedies & the Role of the Redeemer,” which is forthcoming in the Fordham Law Review and is available in draft form on SSRN.
