When Kiowa Tribe of Oklahoma citizen DJ Koon bought a 2005 Nissan Sentra in 2012, he didn’t expect to find himself fighting a debt collection lawsuit for the next 10 yearsIndebtedness lawsuits are the most common type of civil litigation in the state, according to a recent study by the Oklahoma Access to Justice Foundation, and available data suggests they are disproportionately filed against lowincome Black, Hispanic, and Native American Oklahomans Koon had landed a job at an oil field in El Reno that required a reliable means of transportation. His 2001 Oldsmobile wasn’t fit for the task, so when he received a pamphlet in the mail for The Key, a used car lot marketing to people with poor credit, he thought he was in luck seemed legit,” Koon said. “When I called they said all I needed to do was bring $500 “ Koon, who lives in Moore, said the process was smooth. He put $300 down, agreed to a biweekly payment of $242 and an interest rate of 20.93%.

The Nissan’s title was supposed to arrive within 30 days, he said. It never did.

Court records show Koon got pulled over in late November for having an expired temporary tag. The vehicle was impounded and Koon stopped paying for it. Over the next two months, Koon and The Key argued about who had the title. During that period, Koon said he paid a coworker $150 per week to drive him to work.

In June 2013, Koon was served a summons for defaulting on his car loan. The Key wanted to collect $7,596, according to court documents. By then, the dealership had repossessed the car and sold it.

“I thought it was a joke,” Koon said.

The process server assured him it was not.

During the trial, The Key revealed Koon’s title was at the dealership the entire time they were telling him to find it at his house. Records show The Key mailed the title in August and it was returned to them a few days later. Where they mailed it is unclear because the address on the package was covered by the Postal Service return-to-sender sticker. The package was also thrown away before the trial date, which kept the court from inspecting it.

The Key and company attorney Mark Stonecipher refused to comment.

Few defendants secure lawyers to help them fight their cases like Koon did. Without counsel, they often get their wages garnished, bank accounts cleared, and homes and cars taken away. The culmination is often bankruptcy and a tattered financial record.

The burden, Koon’s attorney Minal Gahlot said, falls on Oklahoma taxpayers in the end.

“It’s a domino effect,” Gaholt said. “If someone gets their wages garnished, they can’t pay their car or house and those items get repossessed or foreclosed. If it’s the provider of a family who is getting garnished, and it usually is, they end up tapping into public assistance. We all end up paying.”

Debt in Oklahoma By the Numbers 340,998 debt collection cases were filed in Oklahoma between 2018 and 2022, according to an August study by the nonprofit Oklahoma Access to Justice Foundation. That’s about 68,200 cases per year.

The number of cases decreased each year, however, falling by more than 20,000 from 2019 to 2020. Katie Dilks, the Oklahoma Access to Justice Foundation’s executive director, said the drop-off in filings correlated with the COVID-19 pandemic. It was a time when courts closed down and federal aid made its way to struggling Americans.

“With the help of federal pandemic relief, many Oklahomans were able to pay off debts they owed, or didn’t have to take out debts to make ends meet in the first place,” Dilks said. “My suspicion is that we’ll see those numbers go back up as more pandemic aid programs come to an end.”

Prices are up 20% since 2019. Boosted unemployment benefits and the federal eviction moratorium ended in the summer of 2021. Emergency rental and utility assistance ran out in the fall of 2022. This year, the pandemic-related public health emergency ended in May, meaning about 300,000 Oklahomans will face disenrollment from Sooner Care over the next few months because of adjusted eligibility requirements.

The Urban Institute, a research organization with the goal of advancing upward mobility and equity for low-income Americans, published an updated map in June showing where Ameri- cans are most in debt and the debt differences between communities that are 60% or more white and at least 60% people of color. The map shows the majority of debtors in the collection in Oklahoma, Caddo and Tulsa counties are people of color, a statistic that does not align with the population of those counties.

In Oklahoma County, where about one-third of residents have debt in collections, 55% of those debtors are people of color, while the population is 46% people of color. By comparison, 45% of debtors in collections are white, while white people make up 54% of the county.

Statewide, the discrepancy is much greater. A fact sheet about debt collections in Oklahoma by the National Consumer Law Center shows the percentage of people with debt in predominantly non-white areas is 62%, compared to 36% in predominantly white areas.

Dilks said that indebtedness litigation is not limited to Oklahoma’s metro areas. The rate of fillings in rural counties is the same, and sometimes greater, than it is in the state’s most populated counties. Data shows that while many rural counties are majority white, most of the debtors are people of color.

One such county is Caddo, where people of color make up half the debtors in collections while accounting for only 44% of the county’s population. White residents make up 56% of the county’s population and the other half of collections cases, making people of color over-represented.

In Oklahoma and Tulsa counties, Black and Hispanic Oklahomans account for a majority of people of color, census data shows. In rural counties like Caddo and Adair, most people of color are Native American and Hispanic.

Types of Debt and The Debtor’s Journey Through Court Oklahomans find themselves in debt for many reasons. They might lose their job and use a credit card or take out a payday loan to pay for groceries or rent. They could have a baby or experience a health crisis and leave the hospital owing thousands.

The trouble starts when people begin to miss multiple payments on those debts and allow late fees to pile on top of already unmanageable balances, Dilks said. After months of making phone calls and sending letters to debtors, creditors turn to the courts as a last resort.

There are two avenues to resolve debt collection cases in Oklahoma. If the amount is less than $10,000, cases are usually filed in small claims court, which requires minimal documentation and a hearing within 60 days. The goal is to hurry the process and avoid a backlog in the court system.

Creditors can also file debt collection lawsuits of any amount in district court. That process is more formal, requiring the debtor to file a response before the court schedules a hearing. It also necessitates more documentation supporting the plaintiff’s claims, so they are more likely to have representation.

Not all creditors use attorneys for small claims filings, but more than 90% do for district court cases, according to the Access to Justice study. Only 3% of debtors have representation.

Legal Aid Services of Oklahoma, a nonprofit providing free legal assistance to low-income Oklahomans, handled 2,199 indebtedness cases from 2018 to 2023 by providing Oklahomans with legal advice, assistance with negotiations and help writing letters, the organization’s director of litigation, Teressa L. Webster, said by email. Of those, 208 involved representation in court.

Without representation, debtors typically have little or no knowledge of the court process or defense options “The most a debtor will know when they get served is their hearing date and that a default judgment will be made if they don’t appear in court,” Dilks said. “They may not know what that means, and any documents they get are only produced in English, making the legal jargon harder to understand for some.”

They might never find out if they’re collectionproof, Dilks said.

“People can claim exemptions if they have undue hardship,” she said.

Those exemptions apply to individuals receiving public benefits from the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, unemployment or social security.

Koon said finding someone willing to defend him without an upfront fee spared him from filing for bankruptcy, but he has struggled to finance anything since he was sued.

“I had no clue about the process,” Koon said. “If I didn’t have my lawyers by my side I would’ve been really hurting financially for a while. They were a godsend for me.”

Small claims proceedings play out differently. An observation of Oklahoma County’s 8:30 a.m. Thursday docket revealed almost no one shows up to defend their small claims case.

Attorney Scott Suchy was there representing multiple lenders.

He said the few people who appear are rarely represented and that his only option is to offer them payment plans. If they refuse a plan or don’t show up, all that’s left to do is find out where they work and garnish their wages, he said.

Suchy said most debtors he meets agree to a payment plan and are good about keeping up with it. He said he does his best to be clear with people about what may happen if they don’t work with him to set up a payment plan.

“I’ve got to be able to sleep at night,” Suchy said. “I try to be upfront by telling people about wage garnishments and the expensive court fees. I think the court fees could be lowered because they can be punitive to debtors.”

In Oklahoma County, the cost of filing a small claims indebtedness lawsuit is $58 for amounts under $5,000 and $219 for amounts between $5,000 and $10,000. For cases filed in district court, that cost can be up to $242 for amounts more than $10,000. To file a garnishment affidavit the cost is $76 the first time and $116 every time a continuation of that collection is filed.

When a debtor receives a judgment against them, they become responsible for paying the balance they are sued for, the court fees, and the amount the plaintiff paid its attorneys. A missed bill of a few hundred dollars can spiral into a debt of thousands after months of nonpayment and court fees.

Possible Solutions for Debtors Suchy said the system is fair.

“For small claims cases, the hearing date and time is on the affidavit,” Suchy said. “Everybody has a fair opportunity to say ‘no, this isn’t me’ or present a defense. We have a good system.”

Dilks and Gahlot said the language of the law sounds fair, but reality is more complex. A fair opportunity for everyone assumes people understand exactly what it means when they’re served and what to do next. It assumes everyone can skip work for a court hearing. It assumes someone is able-bodied. It assumes people don’t have kids to drive to school or daycare. It assumes people can pay for child care in the first place.

The Oklahoma Access to Justice Foundation report recommended ways to help ensure easy access to the courts and fair outcomes for debtors.

Among the suggestions are making court documents easier to read and providing them in languages besides English, allowing defendants more flexibility when it comes to making scheduled hearings, dismissing cases with prejudice if a plaintiff does not appear and expanding free mediation services, which can help reduce the number of cases that come before a judge.

For many low-income Oklahomans who face debt collection lawsuits, the only solution is filing for bankruptcy, sometimes years later, Gahlot said.

For Koon, having attorneys on his case spared him that fate. Still, the lawsuit changed his life forever, he said.

The repossession of the Nissan he drove for four months stayed on his credit history for seven years. It effectively barred him from financing another car and securing a home loan when his circumstances changed and he could afford it. As far as he can tell, he’s stuck with high down payments and interest rates for the foreseeable future. Buying a home is a distant prospect.

“This issue needs to be brought to light,” Koon said. “The common person doesn’t worry about law. They worry about getting to work, feeding their family and what bills they have to pay every week.”