Bill collectors seize 5 percent of Alaska dividends

Posted: Thursday, October 10, 2002

ANCHORAGE - Bill collectors will grab about 5 percent of Alaskans' permanent fund dividends this year, according to the state Department of Revenue.

The state transferred the bulk of $911 million in permanent fund dividends into bank accounts via direct deposit Wednesday and the rest will be mailed later this month.

Tapping into Alaskans' dividends has become standard procedure for people owed money. Garnished dividends are an important source of payment for child support, parking tickets, student loans and delinquent federal taxes.

About 591,500 Alaskans were to receive a dividend of $1,540.76 this year.

The nearly 150,000 claims federal, state and city agencies made against dividends last year added up to almost $300 million, said Larry Persily, deputy commissioner of the state Department of Revenue. Since dozens of those claims may have lined up behind the same dividend, Persily said, closer to $50 million was paid out, about 5 percent of the total.

The biggest haul is by the state Child Support Enforcement Division. First in line, with the right to take 100 percent of the check, the division took $15 million out of dividends last year to pass on to parents and children.

"The permanent fund dividend is very significant. Especially this time of year, it's really a windfall for a family," said Wendy Jo Williford, deputy director for the division. "Lots of parents, the only check they see every year is the garnisheed dividend."

Kevin O'Connell, collection manager for Alaska Court Collections, said without the dividend it would be difficult for people to collect money they've been awarded by the court.

"A lot of people work under the table," O'Connell said, "or for whatever reason their assets are muddied waters."

After child support, Persily said, the order of priority for seizing dividends is:

• Alaska student loan program, which can take 100 percent the dividend.

• State agencies, 100 percent. Examples include unemployment fraud or defaulting on a state loan.

• Internal Revenue Service, 100 percent.

• Court-ordered payments to victims, 100 percent.

• Court-ordered fines, 100 percent.

• Domestic violence payments, 100 percent.

• Others, such as traffic tickets, small claims court decisions in landlord-tenant disputes, fuel bills, or unpaid rent, 80 percent.

"When you get to all others, it's first come, first serve," Persily said. "If there's money left, you want to be first in line."

Anchorage pulled in $3.3 million last year to help pay for criminal fines, indigent defense in court, jail costs and other fees, the city said. It asked for $9 million.

Kenai got in line for the first time last year. The city spent $1,500 to wade through data glitches, then collected $35,000 in unpaid traffic tickets that piled up over the last 10 years.

Sheri Greene, owner of Alaska Credit Agency in Kodiak, looked for a profitable way to increase her collections three years ago and decided to put more effort into pursuing dividends. Because debts must be processed through small claims court before they can be submitted against a dividend, Greene advises her clients to process cases before April 1, the deadline for garnishment filings.

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