Posted May 19, 202012:07 pm
When he was 15 years old, Jerry Davidson found solace in a patch of land down the road from his house in LeFlore County, Oklahoma.
That’s where he taught himself how to hunt – a pastime he grew to love, but not as much as the land itself.
Years later, Davidson, now 54, built a house on the land he treasured, taking out a mortgage in 2009.
In 2015, missed payments led Bank of America to file a foreclosure on the property. Davidson, who is disabled, said he returned home after several weeks in the hospital to find three slips of paper in the mail: Notices of late payment, foreclosure and a sale date.
Davidson was distraught. He was certain he would lose his home and become homeless.
Concerned for Davidson, his neighbor contacted Legal Aid Services of Oklahoma, one of more than 130 programs in the country that provide legal representation to low-income Americans.
A sale of the property was suspended, and in 2018, Davidson’s attorney filed a petition asking the court to dismiss the foreclosure case.
The suit, which is pending in federal court, alleges Bank of America did not hold the promissory note for the mortgage and committed fraud during the foreclosure attempt.
In court filings, Bank of America said that it does hold the note and was entitled to foreclose the property, rejecting notions of fraud.
With the matter up in the air, Davidson remains uncertain about the future.
“There are three things I can’t do without,” he said. “That’s God, my kids and my place. Everybody has to have roots.”
In recent years, growing numbers of Americans have represented themselves in civil court.
The outcome of these court cases deeply affects people’s livelihoods and personal lives. Civil courts deal with family law cases, such as divorces, child custody and domestic violence protective orders. They also address consumer debt matters, like foreclosures, evictions and debt collection cases.
Now, legal aid programs are preparing for an onslaught of new cases as the pandemic thrusts Americans into financial instability.
“I think the pandemic has … brought into stark contrast the inequities in our community at large, based on economic situation and racial position in our community,” said Colleen M. Cotter, Legal Aid Society of Cleveland’s executive director. “I think it’s going to be a long, difficult haul for people who live in poverty – either not having a job or having jobs that put them at risk.”
At the same time, many legal aid programs are bracing for funding losses that will force them to do more with fewer resources.
Big If True spoke with seven legal aid attorneys, who detailed increased requests for assistance with employment issues, domestic violence protective orders and evictions. Further down the line, they expect bursts of debt collection cases, foreclosures and bankruptcies.
“It’s like standing on the shore waiting for the waves to hit you,” said Michael G. Figgins, who heads Legal Aid Services of Oklahoma. “Some of them are going to curl up on your knees, and some are going to knock you on your butt.”
Illegal evictions, frozen bank accounts and workers’ rights
Almost 15 years after Hurricane Katrina, Southeast Louisiana Legal Services still receives requests for assistance connected to the disaster, Executive Director Laura Tuggle said. She thinks the coronavirus may carry its own “long fuse.”
Southeast Louisiana Legal Services has received several dozen calls regarding illegal evictions in the region. In one such call from April, a woman who was hospitalized with covid-19 explained that she had lost her job and feared eviction just as the coronavirus had torn a hole in her life.
“Her husband had died from covid the week before, and she was battling the same illness,” Tuggle said. “She was getting texts from her landlord saying he was going to evict her if she didn’t pay the rent. She was really in no condition to be dealing with this.”
Tuggle said that her organization was able to resolve the situation without filing anything in court.
In other situations during the pandemic, court action has been needed but not possible.
For example, state laws require some types of income, like child support or unemployment payments, to be exempt from garnishment. After losing a debt collection case, a debtor can request a hearing to determine whether certain funds in their bank account are protected from garnishment.
In Iowa, those hearings normally take about a week to schedule, said Alex Kornya, litigation director for Iowa Legal Aid.
“Now, given the reduced functions of the court, we’ve had clients who waited weeks or are being asked to wait even months to have those hearings,” he said. “The problem is that, in the meantime, they can’t access the funds. Their accounts are frozen.”
Kornya said this situation has come up at least dozens of times during the pandemic and can lead to evictions and utility shutoffs.
Legal aid programs are also seeing huge jumps in inquiries about employment issues, from filing for unemployment to questions about the rights of workers with concerns that their employers aren’t doing enough to protect them from exposure to covid-19.
From late February to early May, Oklahomans filed about 375,000 unemployment claims. Figgins said the shock to the state’s unemployment system has been significant.
“I think they’re doing the best they can, but sometimes mistakes are made, appeals need to be made, and when you’re in that kind of situation, you can’t think clearly,” Figgins said. “There’s anxiety. There’s stress, so legal aid needs to be there for all these folks.”
Cotter said that at Legal Aid Society of Cleveland in Ohio, calls regarding employment issues increased by more than 100 percent.
“Overnight, people were losing their jobs, afraid of losing their jobs, trying to get unemployment or in a situation where they were faced with having a job, but maybe their employer wasn’t instituting what they considered safe practices,” Cotter said. “Folks were calling us to ask us what their rights are.”
In response to that call volume, the Legal Aid Society of Cleveland set up a hotline for information on workplace rights and created virtual advice clinics led by attorney volunteers.
With funding, “all bets are off”
Legal Services Corporation President Ronald S. Flagg said covid-19 hit legal aid programs and their clients with a “triple whammy” of shifting to remote work, growing requests for help and shrinking funding.
Legal aid programs are funded through a mix of sources, including the government, nonprofits and charitable giving from individuals and businesses.
Some programs rely heavily on what are known as IOLTA funds, or Interest on Lawyers’ Trust Accounts.
Most lawyers have trust accounts where they hold funds for clients. Since the early 80s, interest on those trust accounts has been pooled by states and directed toward legal aid programs.
When interest rates are high, legal aid programs benefit. But in March, the Federal Reserve slashed its influential interest rate to almost zero.
Some legal aid programs estimate they will lose millions of dollars as a result, Flagg said.
For Southeast Louisiana Legal Services Corporation, about a quarter of the budget comes from IOLTA funds, Tuggle said.
“So, we are expecting somewhere between a $350,000 to $500,000 hit for 2020, which we think we can survive, but 2021 – all bets are off,” she said. “We’re worried about it, but we’re not going to stop serving people.”
Some legal aid programs have lost local or state funding, private fundraising dollars or revenue from filing fees due to closed courtrooms.
To deal with the situation, some have sought cash infusions from local businesses and nonprofits. Others are seeking covid-19 relief funds. The Legal Aid Society of Cleveland, for instance, received a loan from the federal Paycheck Protection Program for $1.5 million, Cotter said.
As part of the CARES Act package that President Donald Trump signed into law in March, Legal Services Corporation received $50 million to provide grants to legal aid programs.
“It is a helpful first step, but it is nowhere near enough to deal with all of the issues I described,” Flagg said.
A relief package approved by the House on Friday, the HEROES Act, would provide the Legal Services Corporation with another $50 million. At the moment, the bill isn’t expected to pass the Senate.