Detroit To Call On Debt Collectors

The city of Detroit has devoted almost $50 million since 2004 to tearing down abandoned buildings. Getting rid of these blemishes has been useful, but feeble collection efforts have left taxpayers footing the bill.

After years of brushing aside sending bills for costs of labor, the city plans to start filing lawsuits against the owners of the 40 priciest demolitions of the past six years, which run more than $25,000 apiece.

Some Detroit denizens remain skeptical. Over the past couple of years, the city has been notoriously negligent about delinquent parking tickets, blight fines, income taxes and the like that estimate to over $200 million.

Late last year, the city and state began tearing down the first of 2,000 dumps in nine neighborhoods with $20 million in government money. Last week, the federal government added in $41 million to demolish or repair the houses, and officials are speaking about how this money could be put to the most efficient use.

Starting in February, the city will present property owners invoices for the cost of the work it took to tear down their buildings. If they don’t pay after 90 days, debt collection agencies that work for commissions will go after the debt. If the debt is huge enough, the Detroit law department could get drawn in and file a lawsuit. Although officials admit that the city will only recoup part of the money, the money could go to fund even more demolitions.

Like a lot of public plans, this one has its critics. Some Detroit inhabitants believe that the collections efforts will unfairly target small business owners and underprivileged landlords. One man remarked that it is easy to catch the guy down the street, but not as easy to nab the wealthy property owner in Texas.

Despite the skepticism, Detroit plans to move ahead and send out the invoices next month.

Mallory Megan works for a debt collection agency. Also she writes stories on business and finance, consumer spending and collection agencies.