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Chicago to Sic Bill Collectors on Citizenry

By Kevin Robinson in News on Jul 9, 2009 2:40PM

2009_07_09_debt.jpg The City of Chicago is strapped for cash. Some would argue that we're on the verge of bankruptcy. Layoffs, budget cuts and asset sales? Those are all on the table, if they haven't been tried already. But Mayor Daley is ready to throw down the gauntlet on people that shirk their responsibility to pay traffic tickets, municipal utility bills and other debts owed to the City that Works. Daley announced yesterday that the city plans to outsource its debt collection to, well, debt collectors. "We escalated it in the '90s...We've been doing this for 15 to 20 years," Daley told the Tribune. "People refuse to pay...they say it's too much," the mayor said, adding "it's hard, to be very frank. Some went bankrupt, some you can't find, some are just refusing to pay...this is nothing new."

Although Daley claims the city has used this tactic for years, he's ready to step up his game - by calling you at home during dinner. The city plans to use one, if not more, debt collection firms to recover outstanding balances owed to Chicago. The city would take a cut of whatever was collected. According to the Tribune, past-due fines and unpaid back taxes accounted for "tens of millions of dollars," including "almost $95 million in unpaid water bills."

While debt collection agencies have a negative association in the minds of most people, Ed Walsh, spokesman for the city's Revenue Department told the Tribune that "we have to review each company on their individual merits," adding that "there are plenty of reputable collection agencies." Some of the firms bidding on the proposed five-year deal with the city include several that collected back taxes for the Internal Revenue Service, until President Obama put the kibosh on the program in March. Noting that a company would need about 200 bill collectors to track down city scofflaws, and that a debt collection firm could keep between 18 and 30 percent of the recovered funds, Sean Keegan, national marketing director of United Recovery Systems in Houston said that Chicago's plan could be a "giant deal."