Municipal Clerk Manual – Courts without JIS - Chapter 4 - Financial Procedures: Missouri Debt Collection Program

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Municipal Clerk Manual – Courts without JIS

		Section/Rule:	4.8
Subject:	Chapter 4 - Financial Procedures	Publication / Adopted Date:	July 2007
Topic:	Missouri Debt Collection Program	Revised / Effective Date:	March 2020

Municipal Clerk Handbook
Courts without JIS
Chapter Four – Financial Procedures

4.8- MISSOURI DEBT COLLECTION PROGRAM

References
Statutes: 67.136, 479.356 488.014, and 488.5030, RSMo
Published: July 2007
Revised: March 2020

Quick Index
Bankruptcy
Debt Collected by Tax Offset and Debt Collection
Legal Basis
Notice
The Purpose of the Program
Tax Offset Program

The Purpose of the Program

The purpose of the Missouri Debt Collection program is to increase current collection efforts to ensure that people owing a debt to the court comply with the orders of the court.

Legal Basis

Section 67.136, RSMo, authorizes municipal courts to use collection agencies to collect court or administrative fines or costs associated with a finding of guilt for a criminal offense or an infraction, or entry of a civil judgment owed, enforceable, past due and remained uncollected.

Section 488.5030, RSMo, authorizes courts to contract with public or private agencies which are under a contract with the Office of Administration or the Office of the State Courts Administrator (OSCA) to collect past-due court-ordered penalties, fines, sanctions, court costs, including restitution and juvenile monetary assessments, or judgments due to the state of Missouri or one of its political subdivisions. Fees and costs of collections shall be added to the amount due, but shall not exceed 20% of the amount collected.

Section 488.014, RSMo, states that courts are not required to collect any court costs due that total less than five dollars.

The debt collection agency under contract with OSCA as of January 1, 2018, is Municipal Service Bureau (MSB). Municipal courts may use the services provided by MSB and receive the same contracted collection rate as other municipal courts using the statewide case management system. Information regarding services provided by MSB, the current commission fee rate, and contact information can be obtained by sending an email to:

Debt.Collection.OSCA@courts.mo.gov

Notification

There is no statutory requirement that debtors be notified that their case may be referred to debt collection. Formal payment agreements are the best way to inform individuals of the consequences of not paying their court debt. (See GN185 – Payment Agreement form). In addition, some courts have posted notices and provided additional fliers to individuals needing additional time to pay their court debt that explain that their debt will be submitted to a debt collection agency if they fail to pay.

Bankruptcy

When a written notice of bankruptcy is received by the court or the vendor, federal law requires that all collection activities (i.e., notices, telephone calls, etc.) stop immediately. The notice does not discharge (excuse or dismiss) the debt. The court’s debt is only discharged if the debtor has listed the court as one of his or her creditors when the bankruptcy was filed. The court has to contact the bankruptcy court to determine if the debt was discharged.

When notice of bankruptcy is received, the court must immediately recall the debt from the debt collection vendor.

Tax Offset Program

Effective August 28, 2015, section 479.356, RSMo, provides that if a person fails to pay court costs, fines, fees, or other sums ordered by municipal court, to be paid to the state or political subdivision, the municipal court may report such delinquencies in excess of twenty-five dollars to the director of the department of revenue and request that the department seek a setoff of an income tax refund

Debt that has been submitted to Debt Collection may also be submitted for tax offset.

While it is recommended that courts utilize both tax offset and debt collection, the tax offset program is not currently available to courts that are not using OSCA’s statewide court automation system. If a court decides to use more than one collection activity, they must make sure that all payments and case information is entered promptly to ensure payment plan balances are current.

Debt Collected by Tax Offset and Debt Collection

When a court participates in both the debt collection and tax offset programs, there is a possibility that the debt will be collected by both programs and result in an overpayment. It is extremely important courts stay current in reviewing collection information received from both programs so that any overpayments can be identified and resolved as quickly as possible. Depending on which program collected the money and where the payment is when the overpayment is discovered will determine how the overpayment will be resolved.

Note:

Staff processing payments should refer to

4.8a

, Debt Collection, Appendix A, Payment Processing Procedures for JIS Courts Participating in the Debt Collection Program.

3. Show Cause Orders and Warrants Issued for Costs

3.1 Courts should consider discontinuing the practice of issuing show cause orders and warrants for outstanding costs. Both of these collection practices are very labor intensive wasting valuable court and staff resources. Instead of trying to collect through these remedies first and then referring the case to debt collection, let debt collection do the work. Establish a due date for the case and if the defendant becomes delinquent, automatically refer the case to debt collection.

4. Paid in Full Notices.

4.1 CSI is required to notify courts within 24 hours when a case is paid in full. This gives the court an opportunity to stop any other collection activities (i.e., release outstanding warrants) that may be in place on the case. The court should determine who will be responsible for processing Paid in Full Notices. Paid in Full Notices are sent via e-mail to the designated e-mail group for the court. The following is a sample Paid in Full Notice:

5. Outstanding Warrants

5.1 The court must establish procedures for handling situations in which a warrant was issued prior to the court signing the MOU, the case was referred to debt collection, the defendant is arrested and posts a cash bond for the original amount assessed for fines and costs.

There are two options courts may use:

1. Option 1: Write off the 20% difference. Collect the cash bond as originally ordered. As soon as the cash bond is posted, put the case on hold and withdraw the warrant. When the court orders the bond paid to fines and costs, forward the entire bond amount to CSI. CSI will deduct their collection fee and pay the balance to the court. The court will receipt the CSI payment on the payment plan receipt screen and reduce the fine amount ordered to reflect that the debt is paid in full.

2. Option 2: Issue a blanket order to increase the bond amount for cash only bonds by 20% when the case is referred to debt collection. In addition, outstanding warrants have to be validated by law enforcement and the courts at least once a year.

Note:

For warrants served out of county, OSCA has checked with MULES and confirmed there is a “hit confirmation” process – a message is sent to the original/initiating agency to confirm the warrant. The bond amount can be modified during this validation process.

The following is a sample local court rule to increase the bond amount by 20% on outstanding cash bonds:

Cases Referred For Debt Collection
Sample Local Court Rule

Pursuant to Section

488.5030

, RSMo the City of __________ Municipal Court of the _____________ Judicial Circuit has contracted with Client Services, Inc. (CSI)., a private collection agency, to collect past due court ordered penalties, fines, sanctions, court costs, including restitution and juvenile monetary assessments, or judgments due to the court.

Unless exempted by the court, cases are automatically referred for collection when the balance becomes 60 days past due. Pursuant to Section

488.5030

, RSMo, a fee equaling 20% of the amount due the court will be added to the balance due on the case. The additional 20% covers the cost of collection and shall be retained by CSI from the funds received, prorated to the amount collected. The remaining portion will be forwarded to the Clerk/Court Services and credited toward the balance due.

For any outstanding warrant issued on or before (

date signed up for Debt Collection Program)

by The City of ___________ Municipal Court of the ____________Judicial Circuit, _________ law enforcement shall add 20% to the cash bond set by the issuing judge and prior to release of the defendant, shall collect the total cash bond amount plus the additional 20% and pay the total amount over to the Municipal Court. The municipal court will receipt and credit the cash bond amount plus the collection fee and forward the total to CSI. If the case has not been referred to CSI for collection, the difference in the bond amount and the full amount of fines and costs will be refunded to the defendant by the Municipal Court.

For future “cash only” bonds we recommend adding the 20% collection fee even though the case may not be referred to CSI when the warrant is issued. If the warrant is served before the case is referred to CSI, the 20% can be refunded with little effort.

Note:

It is recommended cases with outstanding warrants be referred to debt collection, since CSI may be successful in collecting from those defendants who are out of the community.

6. Notification of Defendants

6.1 There is no statutory requirement that defendants be notified that their case may be referred to debt collection. Some courts, however, have developed notices for the defendant. See section 4.8b, Debt Collection, Appendix B for a sample notice to the defendant explaining the time payment fee, debt collection program and tax offset program. Each court can decide what, if any, promotional information will be utilized in their court.

Extract Process

After a court submits the necessary documentation to join the Debt Collection Program, the Information Technology Division of OSCA prepares the court’s data for extraction. Twice daily, seven days a week, programs are executed that:

§ Identify and refer eligible cases to CSI that meet the criteria established in Criteria section of these procedures; and

§ When a new case (a case that has not been referred to debt collection previously) is identified, the programs will automatically update the “Date Sent to Collection” field on Custom Payment Plan Creation (CBAPLAN) with the date of extraction.

The following information is sent to CSI on each case referred for debt collection:

§ Transaction Type (i.e., is it a new case referred to debt collection or an update to a case that was previously referred);

§ Court JIS Location Code;

§ Circuit;

§ Payment Plan Number;

§ Defendant Party ID;

§ Case Number;

§ Case Type (criminal, traffic, etc.);

§ Case Description (style of case);

§ Defendant Name;

§ Defendant Address;

§ Defendant Date of Birth (if available);

§ Defendant Social Security Number (if available);

§ Defendant Driver’s License (if available);

§ Balance Due;

§ Original Due Date (due date of the final payment on the payment plan);

§ Case Filing Date;

§ Defendant Telephone Number (if available); and

§ Defendant Sex (male or female).

Update Process

CSI will receive an electronic file twice daily, seven days a week to update information on cases referred previously for collection. The following updates are sent to CSI:

1. Payments

1.1 CSI will receive a balance update (i.e., amount of the payment) in the event an eligible payment is applied to a referred case. See sections 4.8a, Debt Collection, Appendix A, for instructions on entering payments on cases referred to debt collection. Eligible payments include:

§ Missouri Tax Intercept Payments – pay type code 1105 – Tax Intercept Elec Transfer. Payments received from DOR by courts that participate in the tax intercept program;
§ Debt Collection Payments – pay type code 1106 – Debt Collection Elec Transfer. Payments received from the collection agency for funds collected from debtors; and
§ Non-monetary write-off – pay type code 8520 – W/O Debt Collection Bad Debt. Non-monetary write-off of referred debt. These require a judicial order.

2. Payment Plan Balance Adjustments

2.1 CSI will receive payment plan balance adjustments when the balance due on a referred payment plan is adjusted. The balance adjustments may increase the balance due (i.e., the clerk adds the $25.00 time payment fee to the balance due) or decrease the balance due (i.e., the clerk forgot to record a payment received prior to referring the case to debt collection). See section 4.8a, Debt Collection, Appendix A, Payment Processing Procedures for JIS Courts Participating in the Debt Collection Program for instructions on entering balance adjustments in JIS.

3. Payment Plan Owner Information Updates

3.1 CSI will receive updated demographic information (i.e., name, address, driver’s license number, date of birth, telephone number, and social security number) on the owner of the payment plan in the event demographic information is changed or updated.

Note:

Demographic information is only updated once a week.

Exempt, Recall, Hold and Resume Process

Although computer programs automatically identify and submit cases to debt collection, the court makes the ultimate decision as to whether or not a case is referred to debt collection. If the court does not want the automated programs to refer a case for collection, the court can override the automated process by updating the referral status of the case. This section provides a high-level overview of activities affecting the referral status of a case.

The following activities are discussed below:

§ Exempting cases from debt collection prior to initial download;

§ Placing cases on collection hold;

§ Releasing cases from collection hold;

§ Recalling cases from debt collection; and

§ Resending cases to debt collection.

See section 4.8a, Debt Collection, Appendix A, Payment Processing Procedures for JIS Courts Participating in the Debt Collection Program for instructions on performing these procedures.

CSI receives an electronic file twice daily, seven days a week to update information on changes related to the referral status of a case.

1. Exempt Process

1.1 An exempt case is a case that has unpaid costs, fines and fees; however, the court has determined that the case will not be referred to CSI for collection.

1.2 Selecting the “Exempt from Debt Collection” checkbox on Custom Payment Plan Creation (CBAPLAN) will prevent a case from being referred for debt collection.

1.3 If a case has been marked exempt, the extraction programs will ignore the case, even if it meets all other criteria for referral.

1.4 The court should consider exempting a case when one or more of the following conditions exist on the case:

§ The court has ordered that the case be exempted from debt collection;
§ The defendant has made other payment arrangements with the court;
§ The court is unable to accurately determine the amount of debt due; and
§ The court has determined that the person on the case is not the defendant.

1.5 Exemption is not limited to the above conditions; however, the court should exercise care when exempting cases that do not fall into any of the above situations.

Note:

A password is required for exempting a case from debt collection and a case can only be marked exempt prior to the initial extract.

2. Collection Hold Process

2.1 Placing a case on hold will temporarily suspend collection activities by CSI.

2.2 Selecting the “Hold” radio button on Custom Payment Plan Creation (CBAPLAN) temporarily suspends collection efforts by CSI.

2.3 The court may place a debt on hold after it has been referred to debt collection if one of the following situations exists:

§ The debtor has asked the court for a determination of indigency;
§ The court needs time to determine the validity or amount of the debt; or
§ The court needs to add new debt (debt that was not previously reported, i.e., the court needs to add the time payment fee to the payment plan) to the case.

2.4 The Court shall release the hold when appropriate.

Note:

A password is not required for placing a case on hold.

3. Release Hold Process

3.1 The court requests that CSI resume actively pursuing collection activity on a case previously placed on hold.

3.2 Selecting the “Release Hold” radio button on Custom Payment Plan Creation (CBAPLAN) releases a case from hold and collection activity resumes at the point where it was suspended.

3.3 The “Date Sent to Collection” field will contain the date when the payment plan was released from hold.

Note:

A password is not required to release a case from hold.

4. Recall Process

4.1 The court is withdrawing the case from collection by CSI.

§ CSI will retain their percentage for collection of any costs or fees collected prior to the recall of the case.

4.2 Selecting the “Recall” radio button on Custom Payment Plan Creation (CBAPLAN) will stop all collection activity on a case previously referred for debt collection.

4.3 No payments will process on the case and no case information will be updated.

4.4 The court should recall a case when one or more of the following conditions exist on the case:

§ The court has determined the costs were incorrectly reported to CSI;
§ The defendant is declared indigent and allowed to serve jail time or community service work in lieu of costs; and/or
§ The defendant is declared indigent and costs are waived.

4.5 The court should exercise care when recalling cases that do not fall into any of the above categories.

Note:

A password is required to recall a case from debt collection.

5. Resend Process

5.1 The court is requesting that a case previously recalled from CSI be referred to debt collection.

5.2 Selecting the “Resend” radio button on Custom Payment Plan Creation (CBAPLAN) refers a case previously recalled to debt collection.

5.3 If the court resends the debt, collection activity starts over from the beginning.

5.4 The “Date Sent to Collection” field will contain the date when the payment plan was resent to debt collection.

Note:

A password is required to resend a case to debt collection.

Collection Process

When a case is referred to debt collection, CSI utilizes a number of collection “tools” to remind the defendant of their obligation to the court and to encourage him or her to pay their debt. This section outlines the collection process that CSI follows.

1. Skip Tracing

1.1 The term “skip tracing” refers to finding missing persons. Since address information in the court records is not always accurate, CSI uses National Change of Address (NCOA) data, credit bureau data, and other automated information sources to verify the accuracy of the address information they received from the court and to locate missing addresses.

2. Notice

2.1 When an address has been verified, CSI issues a series of notices.

2.2 The purpose of the notices is to remind the defendant of his or her debt and to encourage them to pay their obligation.

2.3 Each notice provides information about the amount owed, payment options and consequences of non-payment.

3. Outbound Calling

3.1 CSI’s primary collection tool is outbound calling (phone calls made by a company to a specified list of contacts.)

§ See section 4.8c, Debt Collection, Appendix C to view a sample notice.

4. Credit Bureau Reporting

4.1 CSI will report a defendant’s outstanding court debt to a national credit reporting agency to cloud the defendant’s credit 30 days after they receive the account if the defendant owes more than $50.00.

Client Services, Inc. (CSI) Payment Processing

CSI processes all payments within one working day of receipt. CSI accepts cash, personal checks, money orders or cashiers checks, and credit cards. CSI can accept checks made out to the court.

Payments Processed by the Client Services, Inc. (CSI) Computer System

The Client Services, Inc. (CSI) Computer System applies payments to the case the defendant specifies. If the defendant does not specify a case and has more than one case or plan referred, all payments are applied to the oldest debt as determined by the oldest “date of the last charge”. In the CSI system, the charge date is the date of violation date or judgment date.

Payments Processed Manually

Manual payments are applied to the case the defendant specifies. If the defendant does not specify a case and has more than one case or plan referred, all payments are applied to the oldest debt as determined by the oldest “date of the last charge”. In the CSI system, the charge date is the date of violation date or judgment date.

Payment Disbursements to the Court

CSI will disburse all payments received during the month, once a month by the fifth business day of the following month. CSI must deduct the 20% collection fee prior to disbursing the payment to the court or the fee will be waived.

All disbursements are done via electronic funds transfer (EFT). When CSI makes the monthly disbursement to the court, an e-mail similar to the following is sent to the court’s debt collection e-mail group:

A spreadsheet containing detailed information on each payment in the EFT is attached to the e-mail. This information is provided so the court can receipt the funds to the appropriate case(s). The following is a sample of the spreadsheet:

Note: Courts should not receipt debt collection payments until confirming the EFT has been received by the bank

Overpayments and Underpayments

CSI will forward all overpayments they receive to the court. Overpayments will be sent via ACH approximately the 15th working day of the month.

If the overpayment totals $5.00 or more, the court may apply the overpayment to other debt the defendant owes or, if no other debt is outstanding, the court will refund the overpayment to the individual.

If the overpayment is less than $5.00, Section 488.014, RSMo states that the court is not required to refund the overpayment and the overpayment can be forwarded to the county for the operation of the circuit court.

In the event that the debtor’s balance becomes less than $5.00, CSI will suspend collection activity on the account and notify the court to recall the debt. Pursuant to Section 488.014, RSMo, the court is not required to collect any delinquent court costs in an amount less than $5.00.

Unidentified Payments

In the event CSI receives a payment that has no identifying information (i.e., cash with no accompanying transmittal, a money order with no identifying information, etc.,) after due diligence to locate the account, CSI will return the payment to the payer.

Paid in Full Notices

CSI is required to notify courts within 24 hours of when a case is paid in full. The payment will not be sent to the court until the fifth business day of the following month. The notice is sent to give the court an opportunity to stop any other collection activities (i.e., release outstanding warrants) that may be in place on the case. Paid in Full Notices are sent via e-mail to the designated e-mail group for the court.

The following is a sample Paid in Full Notice.

Bankruptcy

When a written notice of bankruptcy is received by the court or CSI, federal law requires that all collection activities (i.e., notices, telephone calls, etc.) stop immediately. The notice does not discharge (excuse or dismiss) the debt. The court’s debt is only discharged if the defendant has listed the court as one of his or her creditors when the bankruptcy was filed. The court has to contact the bankruptcy court to determine if the debt was discharged.

When notice of bankruptcy is received, the court must immediately recall the case. See section 4.8a, Debt Collection, Appendix A, Payment Processing Procedures for JIS Courts Participating in the Debt Collection Program, for detailed instructions on recalling cases from the debt collection program to discontinue collection activity.

Missouri Courts Tax Offset Program

Under the Missouri Courts Tax Offset Program as authorized by Section 488.5028, RSMo, a defendant’s Missouri tax refund can be intercepted to pay delinquent court costs, fines and fees.

Cases that have been submitted to Debt Collection may also be submitted for tax offset. Since CSI does not initiate collections made via tax offset, all monies collected through tax offset are payable to the court. A 20% service fee is not deducted from tax intercept payments.

It is recommended that courts utilize both tax offset and debt collection. If a court decides to use more than one collection activity, they must make sure that all payments and case information is entered promptly to ensure payment plan balances are current.

Debt Collected by Tax Offset and Debt Collection

When a court participates in both the debt collection and tax offset programs, there is a possibility that the debt will be collected by both programs and result in an overpayment. It is extremely important courts stay current in reviewing collection information received from both programs so that any overpayments can be identified and resolved as quickly as possible. Depending on which program collected the money and where the payment is when the overpayment is discovered will determine how the overpayment will be resolved.

Tax Intercept Occurred But Has Not Been Distributed to the Court and the Defendant Pays Debt Collection

The court can request that any Tax Offset collections not disbursed be refunded to the defendant. The court can request a refund by sending an email to Tax.Offset.Workflow@courts.mo.gov. The email should be attached to the Notice of Intercept and state that the tax intercept should be returned to the defendant since the debt was collected via debt collection. A sample follows:

Tax Intercept Occurred and Was Distributed to the Court and the Defendant Pays Debt Collection

When the court receives the tax intercept, they will receipt the tax intercept which will reduce the balance due on the case. The reduced balance is reported to CSI on the daily extract; however, if the defendant pays CSI before the intercept is receipted on the case; the court can refund the overpayment to the defendant when the court receives the payment from CSI.

CSI Collects the Debt But Has Not Sent the Funds to the Court and a Tax Intercept Occurs

If the court receives a Paid in Full Notice from CSI, the court will request that the Tax Intercept be refunded to the defendant. A refund can be requested by sending an email requesting a refund to mailto:Tax.Offset.Workflow@courts.mo.gov. The email should be attached to the Notice of Intercept and explain that the intercept needs to be returned to the defendant since the debt was collected via debt collection.

The Court Receives a Partial Payment from CSI and a Tax Intercept Occurs for the Entire Debt

If the court receives a partial payment from CSI, the court will request that the tax intercept be adjusted to the current balance due and the overpayment be refunded to the defendant. The amount of the tax intercept can be adjusted by sending an email to Tax.Offset.Workflow@courts.mo.gov. The email should be attached to the Notice of Intercept and explain that part of the intercept should be returned to the defendant since some of the debt was collected via debt collection.

Reports

CSI shall remit the following required reports to the Courts. The reports shall be formatted, tracked and totaled within the fiscal year dates of July 1 through June 30. CSI may submit the required reports electronically in a format approved by OSCA.

Xerox Payment Analysis Report

The Xerox Payment Analysis Report shall be delivered monthly to each court for transactions applicable to that court. The report shall consist of a listing of all payments by date, defendant name, court location, designated court reference numbers, payment amount, type of payment, all disbursements by court location, court reference number, amount and date. CSI shall provide a separate accounting for each payment category to ensure a clean payment transaction trail. Reports containing errors are required to be corrected and resubmitted. The following is a sample report:

Forms

Debt Collection Memorandum of Understanding-Muni.doc

Court Information Sheet.doc