Once upon a time, if you couldn’t pay a debt, you would find yourself passing the days in a debtors’ prison—or even auctioned off to a life of indentured servitude. A lot of men and women of renown found themselves serving time in jail for failing to pay debt, including several heroes of the American Revolution. This was one of the factors leading to the abolition of debtors’ prisons in the United States by the 1830s.
But in recent years, there has been a resurgence in jail sentences involving everything from unpaid traffic tickets to child support and credit card debt. Should you be worried?
Can’t pay the fine? Do the time
If you don’t have your money together, you get on probation. Remember, probation is a privilege and not a right. If you don’t meet your probation requirements you might say, “Now what can you do about that?” Well, we can haul you back in here and revoke your probation and put you in jail and we will, straight up. — Robert Wynne, Solicitor General, Sandersville, Georgia, July 2013, to assembled criminal defendants in State Court.
In 1983, the Supreme Court ruled in Bearden v. Georgia that you could not jail a person who was unable to pay their fines. The ruling determined that arresting a person who, through no fault of their own, is unable to pay their court debts despite making bona fide efforts to do so, violates the Equal Protection Clause of the Fourteenth Amendment.
Where Bearden v. Georgia fails is in defining what exactly a “bona fide effort to do so” actually means. The result is the emergence of a new private industry that cooperates with local courts to punish those who can’t afford to pay up. If a judge finds you in contempt of court for being incapable of paying a traffic fine or a child support installment, you may find a warrant being issued for your arrest.
According to a report by Human Rights Watch, more than 1,000 courts use private companies to oversee the probation of hundreds of thousands of debtors each year. The same report found that in Georgia, over $100 million in fines were collected by probation companies in 2012 alone. Sometimes, even if you have been found not guilty of the original traffic offense or misdemeanor, you may still owe a probation company money.
Credit card debt a road to jail too?
Criminal fines are one thing, but civil debts like medical bills and credit cards are another.
In general, it is extremely difficult for credit collection agencies to garnish wages or bank accounts and virtually impossible to be sent to jail over failure to pay one’s civil debts.
However, you can still potentially land in jail for contempt of court. Debt collectors employ an ever-expanding range of tactics, not all of them legal. “Sewer service,” for instance, is a trick in which debt collectors fail to serve court summons to debtors, and falsely certify to courts that complaints were served and that the cases themselves have merit.
Beware of junk debt buyers
If the interest on a debt originally owed to a creditor has mysteriously grown 500% or more, you’re dealing with what’s known as a “junk debt buyer”. These companies are known to employ unscrupulous tricks; one of their favorites is to flood the courts with bogus lawsuits with the hope of hitting gold. In Maryland, third-party debt buyers alone filed 37,000 collections suits in 2011 and 22,000 the following year.
The legality of such suits is highly in question; Peter Holland, consumer rights attorney and law professor at University of Maryland, has written extensively about the questionable tactics junk credit buyers employ.
“To understand just how bad it gets, read the complaint filed by Wells Fargo against one of its debt buyers called United Credit Recovery, LLC, in which Wells Fargo alleges that the defendant manufactured fraudulent bank affidavits of sale using the old ‘cut and paste’ trick,” writes Holland on his firm’s website.
Unfortunately, a for-profit motive exists to punish people rather than assist them in becoming debt-free, functioning members of society. With hundreds of thousands of junk lawsuits and arrest warrants being filed to punish indigent debtors every year, it’s extremely important for consumers to protect themselves and get informed.
For more info on how prevalent the practice of jailing debtors is becoming, check out the video below from PBS’s NewsHour:
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