Note 5: Deferred Court Costs, Net

The Company contracts with a nationwide network of attorneys that specialize in collection matters. The Company generally refers charged-off accounts to its contracted attorneys when it believes the related consumer has sufficient assets to repay the indebtedness and has, to date, been unwilling to pay. In connection with the Company's agreement with the contracted attorneys, it advances certain out-of-pocket court costs ("Deferred Court Costs"). The Company capitalizes Deferred Court Costs in its consolidated financial statements and provides a reserve for those costs that it believes will ultimately be uncollectible. The Company determines the reserve based on its analysis of court costs that have been advanced and those that have been recovered. Deferred Court Costs not recovered within three years of placement are fully written off. Collections received from these consumers are first applied against related court costs with the balance applied to the consumers' accounts.

Deferred Court Costs for the three-year deferral period consist of the following as of the dates presented (in thousands):


	December 31, 2011			December 31, 2010
Court costs advanced	$	228,977		$	194,612
Court costs recovered		(60,017	)		(49,215	)
Court costs reserve		(130,454	)		(113,239	)

	$	38,506		$	32,158