Can you go to jail for debt? If you look up the phrase “debtor’s prison” in Wikipedia, you get the following description:
A debtors’ prison is a prison for those who are unable to pay debt. Prior to the mid 19th century debtors’ prisons were a common way to deal with unpaid debt.
Notice how it says “prior to the 19th century”? That’s how most of us tend to think of the idea of debtor’s prison — as an awful practice relegated to the dustbin of history.
But fast forward to 2011 and it turns out that people are still being locked up for failing to pay debts they owe — despite the fact that debtor’s prisons are illegal in the United States.
How is that possible? Well, more than a third of states still allow people to be arrested and jailed for failure to pay their debts. So… debtor’s prisons are not allowed, but locking people up because of their outstanding debt is okay? It seems like a very minor distinction, and yet, that’s little comfort to the people who are getting jailed.
One woman for example, got a shock when she was pulled over for having a loud muffler while driving home. She told NPR how the officer arrested her on the spot and took her to jail:
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That’s when I found out I had a warrant for failure to appear in Macoupin County. And I didn’t know what it was about.
Eventually she learned that a collection agency was pursuing a $730 medical debt that she had not been able to pay, and had filed a lawsuit against her, subsequently sending her a notice to appear in court. But she says she never got the notice, and when she missed the court date, the warrant was issued, which led to her arrest.
To get out of jail, she had to wait four days while her father raised the $500 necessary to free her on bail.
The $500 was immediately turned over to the collection agency.
So can you go to jail for debt? In a word, yes.
This kind of story happens more often than we might imagine. According to the NPR article, the FTC received 140,000 complaints about debt collection agencies in 2010 — 18% more than the previous year.
What can you do to protect yourself? If you have unpaid debt of any kind (even unpaid medical bills, like in the story above) you should be on the lookout for any kind of documents or notices arriving in the mail, especially that look like they are from a collection agency. If you do receive any correspondence from them, read through it carefully to see if there is any indication that you’re required to appear in court — and if there is, make sure to show up that day and explain your situation.
Also, inform yourself about the rights you have and how to deal with debt collectors by using the following resources:
And of course, if you have debt and want to get it all paid off, use ReadyForZero to organize all your debts in one place and get an automatic plan for conquering them one by one.