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July 17th, 2010
05:26 AM ET

Not Paying Debts Could Land You Behind Bars?

Yes, it’s true! If you have unpaid debts floating out in collectionville beware. Prior to the mid 19th century debtors' prisons were a common way to deal with unpaid debt. Currently, the practice of giving prison sentences for unpaid debts has been mostly eliminated, with a few exceptions. In Minnesota, judges have issued arrest warrants for people who owe as little as $85, which is a fraction of the cost it would take to house the inmate overnight. Debtors targeted for arrest owed a median of $3,512 in 2009, up from $2,201 five years ago. A judge sentenced a Kenney, Ill., man "to indefinite incarceration" until he came up with $300 toward a lumber yard debt, but it appears as though that those jailed for debts may be the least able to pay.

What can you to make sure that you’re protected and you’re rights are not violated?
Know the law. I’ve read several stories of people who are fighting back, simple by being armed with the law and in particular the Fair Debt Collection Practices Act, which covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage.

The way that most people are ending up behind bar is ignoring a court summons. Collection agencies are feeling the pinch of the economy as well as most business across America, so in turn they are playing hard ball. If they are unsuccessful reaching you by telephone to attempt to settle the matter, they have the option to file suit against you. Once the suit is filed the court will request your appearance, but if you neglect to attend, a warrant may be issued for your arrest. In many cases people have remained behind bars until bail was made, which is often the amount they owed the collection company.

It’s more important now than ever to know your rights. Visit the Federal Trade Commissions (FTC) website http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm to get additional information to make sure you’re equipped to avoid being placed in the slammer for your unpaid debt.

soundoff (9 Responses)
  1. Michael Armstrong Sr.

    Not since the great depression has American laws become so enforced such as being cast into prison for stealing a loaf of bread is this the direction our country is heading under this administration .

    July 17, 2010 at 6:21 am |
  2. Ralph

    I live in Minnesota and have delt with this situation myself. I can tell you that we never received a summons to go to court. Many others have had the same experiance. The first we heard of a court date was after the judgement had already been made. To top it off, the collection agency DOUBLED the amount we owed and we were forced to pay. Capitalism at it's best!

    July 17, 2010 at 7:34 am |
  3. Frank Genovese

    I Guess The Whole Entire Country Should Be Placed Behind Bars. With Foreclosures And Auto Repossessions On The Rise, This Is Not The Right Time For These Actions. The Justice System Should Concentrate On More Serious Criminals. Its Probably One Of Many Reasons That They Did A Way With Debtors Prisons.
    Personally, The Economy And The Country Does Not Need This Right Now. This Could Cascade Down To Make It More Difficult For People To Find Work, And To Concentrate On Other Matters That Are Personally More Detrimental To Them.
    Many Write-Offs Are Going To Occur While This Economic Down Turn Continues. As I Mentioned On Another Blog. We Will Have To Live With This For A While, And We Will Pay For This By Way Of Taxes. Not Very Nice, But Until The Employment And Wages Improve This Will Probably Be The Only Way To Approach This. At This Time No Matter What Way That This Is Approached=This Should Have Been Dealt With Almost On A Real Time Basis. Not Let It Fester Many Years Later, And Many Folks Are Now Out Of Work. This Was An Accumulative Problem Thats Been Going On For Years.
    Many Commercial Banks Didn't Do Their Home-Work When They Gave Out These Loans. This Would Also Include The Famous Credit Card. Many Of The Regulations That Have Been Applied Over The Last Five Years Doesn't Go Far Enough To Protect The Consumer. Again,
    The Chickens Have Come Home To Roost..

    July 17, 2010 at 8:21 am |
  4. JulieAnne

    Yes, I knew....firsthand...this has been going on for AT LEAST eight years or so in the District of Columbia and California. Where has everyone been but so glad to see you covering this.

    Now read it is happening regularly in Arizona and Oregon, too.

    I served 17 months (absolutely no prior record) with very violent, dangerous people in a jail setting for not paying personal, residential rents, even though there were civil suits involved in most of the debts and I was in bankruptcy at time (Chapter 7 total wipeout).

    I spent over half of the time in solitary confinement (without the one hour per day of mandated outdoor time, because in DC Jail they "don't have the funding for staff to do that").

    I tried and tried to get media coverage of this at the time–New York Times, Fox News and local reporters and no one would cover it, despite the fact I knew people at these media outlets.

    I also lost my profession and my job and to this very date, cannot obtain a job making more than $15.00 an hour.

    So much for the good ole' U.S.A.! Looks like it's back in time several centuries for us!!! Where are the legal and historical scholars? PLEASE, somebody get this on camera, do interviews with those of us who have served time on debts. You will find a shocking wealth of experiences out there.

    JulieAnne

    July 18, 2010 at 2:46 pm |
  5. Nikki Perez

    Arrested for debt? That is cruel and unjust considering current economic conditions. Obviously with a decent lawyer, one can avoid going behind bars. Those like Kenny Ill who are incarcarated for such minor debt, are the same ones that can't afford lawyers. Funny because those who pull out student loans to make something out-of-themselves, might just end up behind bars one day!

    July 18, 2010 at 7:07 pm |
  6. Smith in Oregon

    The horrific and utterly corrupt Republican administration of Bush-Cheney forgave 37 Billion dollars in Loans to Israel, making that a huge free American taxpayer Grant. At that rate, all funding and loans to Israel are apparently now seen as nothing but 'grants' and 'free American money'.

    While domestically, people with as little as 1,000 dollars in State or Federal Taxes being owed have their bank accounts zero'd by the State Revenue or IRS agents without warning! Give 37 Billion to Israel, Give 100 Billion to Afghanistan, but screw the American's that owe 1,000 dollars! What a terrible legacy the goose stepping Bush Family has left America.

    July 19, 2010 at 1:39 am |
  7. Michael Armstrong Sr.

    @ Smith what in the world does Bush have to do with this new law this new law is Obamas baby .

    July 19, 2010 at 8:09 am |
  8. Anthony

    Now..now everyone. The fact remains – debts don't mysteriously appear out of the sky, if you know you owe a debt, and you can't pay, you should make collaborative arrangements to somehow satisfy the debt rather than elusive avoidance. We are all hurting, creditors too, so if you have a court ordered judgment, there is no way you were not notified to some degree it was coming. Also when you owe a debt, specifically a judgment, you are also taking food from another family's mouth. Remember, a loss has to occur before a judgment can be awarded so that family never recovers that loss if they can't collect on the judgment/debt. We call that being a deadbeat so bottomline, no mercy here, if you owe it, pay it or face the music! Too bad the law only applies to one state

    July 19, 2010 at 1:40 pm |
  9. It Doesn't matter who I am

    If you are going to report a story, report it accuarately! People go to jail in the context of a civil judgment for contempt of court. This means that they are going to jail for failing to disclose assets, not because they did not pay their debt. Failing to obey any court order may be punishable by the civil remedy of contempt. There is nothing wrong with this method of judgment enforcement unless you believe people should not obey a Judge's order.

    July 19, 2010 at 4:45 pm |