{"id":930,"date":"2015-08-31T10:03:52","date_gmt":"2015-08-31T17:03:52","guid":{"rendered":"http:\/\/brandmettasandbox-bwc.com\/?p=930"},"modified":"2015-08-31T10:03:52","modified_gmt":"2015-08-31T17:03:52","slug":"can-creditors-throw-jail-not-paying-debts-part-2","status":"publish","type":"post","link":"https:\/\/bluewatercredit.com\/can-creditors-throw-jail-not-paying-debts-part-2\/","title":{"rendered":"Can creditors throw you in jail for not paying your debts? (Part 2)"},"content":{"rendered":"

As we talked about in the first installment <\/a>of this blog post, debtors use the court system to collect, bending the legal process past its intended spirit in some cases.<\/p>\n

When a debtor\u2019s examination is requested and a defendant\/debtor doesn\u2019t appear for any reason, they can be found in contempt of court. At that point, a warrant can be issued for their arrest and they can be incarcerated, placed behind bars technically for contempt of court \u2013 not failing to pay the debt. Not so coincidentally, the bond you have to pay to be released is usually the exact amount you owed to the debtor, or the amount of the original judgment (which could include late fees, legal costs, etc.) Issuing court costs and fines in the amount of the original debt, and then instigating the legal process for failure to pay, is another questionable tactic being used to collect debts.<\/p>\n

In this way, the court system has become a vicious, obedient hunting dog for debt collectors.<\/span><\/em><\/strong><\/p>\n

\u201cThe law enforcement system has unwittingly become a tool of the debt collectors,\u201d said attorney Michael Kinkley, who represents arrested debtors. \u201cThe debt collectors are abusing the system and intimidating people, and law enforcement is going along with it.\u201d<\/p>\n

Remember that whether or not a debtor\u2019s examination is requested, a contempt of court ruling issued, an arrest warrant disbursed, or the debtor is arrested and placed behind bars, the mere threat of this happens created an avenue for collection agencies and debtors\u2019 attorneys to threaten consumers \u2013 scaring many debtors into paying up without really understanding the process, the law, or their rights.<\/p>\n

For instance, most consumers aren\u2019t aware that the U.S. Supreme Court has banned the use of prison to punish indigent (those who can\u2019t pay) criminal defendants who fail to pay for court costs and fines as part of their sentence.<\/p>\n

However, many state and local courts skirt around this by assessing fees, fines, and costs as part of a civil fine or \u201ccriminal justice debt,\u201d or a condition of someone’s probation or parole. In that way, if you fail to pay these fines, you may go to jail.<\/p>\n

What\u2019s even more frightening is that these debtors don\u2019t just enact this legal process one time. In fact, they often file for a debtor\u2019s examination multiple times, or in the most egregious cases, in an endless loop until they eventually snare the debtor. That\u2019s a favorite tactic of the \u201cbottom feeders\u201d of creditors like subprime and pay day loan lenders, who have a system to in place to repeatedly file the exam orders, some times as often as once a month. They\u2019re just waiting for you to miss a court date, miss your paperwork, or become overwhelmed or confused by the sheer volume of court actions against you\u2026and then you\u2019ve fallen into their trap.<\/p>\n

Who are the creditors engaging in such questionable collection practices?\u00a0<\/strong>
\nThese days, collection agencies aren\u2019t just picking low-hanging fruit like in more prosperous times before the Great Recession. Now, they are often well organized, well funded, and aggressive like never before at going after debtors. In many instances, they\u2019re run by attorneys, who have no qualms about escalating a file to the court system and filing legal paperwork. They are big, hungry, and bloodthirsty sharks the likes of which the debt collection industry has never seen.<\/p>\n

In fact, three debt buyers account for at least 15 percent of all debt-related arrest warrants since 2005 in some states, Unifund CCR Partners, Portfolio Recovery Associates Inc. and Debt Equities LLC. Together, they\u2019ve filed tens of thousands \u2013 or maybe even hundreds of thousands \u2013 of legal actions to threaten and force debtors into paying.<\/p>\n

To be clear, these aren\u2019t just recent unpaid credit card debts from consumers who are abusing the system, themselves. Most of these collection firms purchase the debts \u2013 often five or six years old or more \u2013 from companies who couldn\u2019t collect, like credit cards, smaller collection agencies, and pay day lenders, most of the time for pennies on the dollar. The big firms then set up automated dialing equipment and a small army of attorneys to try to contact (harass) consumers, trying not only to collect 100 percent of the debt but pocketing legal fees and interest. Often, they don\u2019t go over legitimate payment options like payment plans or settlements, but their goal is always to make at least twice what they paid for the debt, plus all costs.<\/p>\n

Do different states have different laws and practices?<\/strong>
\nThe good news is that the debt collection laws are far more responsible in a lot of states, but in Ohio, Missouri, Minnesota, Illinois, and Pennsylvania, the gloves are off for creditors who want to file judgments and get their debtors thrown in jail if they don\u2019t pay \u2013 or to make them. In Minnesota for instance, debtors frequently spend up to 48 hours in jail cells among other lawbreakers before they even get to see an attorney or get a bail hearing. Arrests for unpaid debts are also increasing in other states because of declining economies, like Arkansas, Arizona and Washington. In some cases, debtors who are arrested are forced to stay in jail until they can come up with some sort of minimum payment.<\/p>\n

Does this serve the public good?<\/strong>
\nIn January, man in Illinois was sentenced \u201cto indefinite incarceration,\u201d locked behind bars until he could raise $300. His crime? He owed an unpaid debt to a local lumberyard. Judges in Minnesota have issued arrest warrants for people who owe as little as $85! In fact, debtors targeted for arrest since 2009 have owed a median of only $3,512 \u2013 hardly a giant pile of money or worthy of our distracting our courts and jails from \u201creal\u201d criminals.<\/p>\n

Make no mistake, these courts aren\u2019t serving the public but actually collecting corporate and private debts at taxpayer expense. For instance it almost always costs far more to put someone through the legal system and house them in jail then the debtor will ever recover. Indigent consumers are often uneducated, preyed on by subprime and shady lenders, barraged with offers for credit with terms they don’t fully understand, and in a vicious cycle of poverty that’s hard enough to escape without adding criminal action against them.<\/p>\n

So what can consumers do to protect themselves?<\/strong>
\nIt\u2019s important for consumers to understand their rights as well as the laws in place to protect them. Each state has its own laws on collections, debt, and the legal process, but some federal statutes, like the Fair Debt Collection Practice Act (FDCPA), strictly prohibit debt collectors from even threatening you with criminal prosecution for failing to pay a debt.<\/p>\n

If you receive any calls from collectors, try to record or document them. Do not give out personal information over the phone. Ask for a supervisor and request any agreements or proposed payment plans or terms in writing.<\/p>\n

When you receive anything in the mail \u2013 whether from collectors, attorneys, or the courts, always open them in a timely fashion. Don\u2019t throw them away but keep them in a file. Always show up for the schedule court appearances or file the appropriate paperwork, even if you don\u2019t have money to pay them.<\/p>\n

Consult with a local attorney, your state attorney general’s consumer division, or free legal counselors most courts have set up to counsel the public.<\/p>\n

If you owe a large sum of money and you\u2019re financially destitute, you may want to talk to a bankruptcy attorney who can file on your behalf, legally excusing you from paying your debts and protecting you from creditors.<\/p>\n<\/span>","protected":false},"excerpt":{"rendered":"

As we talked about in the first installment of this […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63,49],"tags":[359,233,64,235],"yoast_head":"\nCan creditors throw you in jail for not paying your debts? (Part 2) | Blue Water Credit<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/bluewatercredit.com\/can-creditors-throw-jail-not-paying-debts-part-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can creditors throw you in jail for not paying your debts? 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