prison cellTo most of us, "debtors' prison" sounds like an archaic institution, something straight out of a Dickens novel. But the idea of jailing people who can't pay what they owe is alive and well in 21st-century America.

According to a report in The Wall Street Journal, debt collectors in Missouri, Illinois, Alabama and other states are using a legal loophole to justify jailing poor citizens who legitimately cannot pay their debts.

Here's how clever payday lenders work the system in Missouri -- where, it should be noted, jailing someone for unpaid debts is illegal under the state constitution.

First, explains St. Louis Post-Dispatch, the creditor gets a judgment in civil court that a debtor hasn't paid a sum that he owes. Then, the debtor is summoned to court for an "examination": a review of their financial assets.

If the debtor fails to show up for the examination -- as often happens in such cases -- the creditor can ask for a "body attachment" -- essentially, a warrant for the debtor's arrest. At that point, the police can haul the debtor in and jail them until there's a court hearing, or until they pay the bond. No coincidence, the bond is usually set at the amount of the original debt. As the Dispatch notes:

"Debtors are sometimes summoned to court repeatedly, increasing chances that they'll miss a date and be arrested. Critics note that judges often set the debtor's release bond at the amount of the debt and turn the bond money over to the creditor -- essentially turning publicly financed police and court employees into private debt collectors for predatory lenders."


Standing Up for Those Who Can't Pay

The practice -- in addition to putting an additional squeeze on poor people -- turns courts and police into enforcers for private creditors, from payday lenders to health care providers. The situation prompted Illinois legislators in July to pass a bill "to protect vulnerable consumers from being hauled to jail over unpaid debts," in the words of state Attorney General Lisa Madigan. The Debtors' Rights Act of 2012 requires two "pay or appear" court notices to be sent to debtors before an arrest can be made, and also prevents creditors from calling for multiple examinations unless the debtor's financial state has significantly changed.

Many of the victims, Madigan noted at the time, were living on funds that are legally protected from being used for outstanding debt judgments, such as Social Security, unemployment insurance or veterans' benefits. In one case she cited, an Illinois court brought a "pay or appear" order against a mentally disabled man living on legally protected disability benefits of $690 a month. The man told the court of his circumstances but was still ordered to pay $100 a month or appear in court once a month for a three-year period.

"It is outrageous to think in this day and age that creditors are manipulating the courts, even threatening jail time, to extract whatever they could from people who could least afford to pay," Madigan said. "This law corrects that gross oversight and puts a stop to throwing people in jail for being poor while still allowing fair debt collection when people have the means to pay their debts."

Illinois notwithstanding, the modern-day debtors' prison probably isn't going away anytime soon given the current economic climate: More than a third of U.S. states allow borrowers who can't or won't pay their debts to be jailed.


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Leslie Payne Simmons

That's right!! America should be in prison for owing so much money and not bothering to pay.

January 09 2014 at 1:48 AM Report abuse rate up rate down Reply
Leslie Payne Simmons

Having worked all my life and strived to keep my credit score close to perfect on a so so salary, I find it disgusting all the people who have hustled and done odd jobs and really mostly absolutely nothing all their lives and have about as much as I do..car, house, etc. If people aren't trying, then they should pay in jail or community service.

January 09 2014 at 1:44 AM Report abuse rate up rate down Reply
Richard George

Nonsense. You can bet your bottom dollar that the MAJORITY of debtors would come-up with the cash to pay their debt, if faced with jail / prison time.

I had a contractor take me for $2500 - the clown never finished the job he was hired to do, after six months of waiting, and dealing with him. I took him to small claims court, and won a $1500 judgment. of course it was up to me to collect, because there is no such thing as "debtor's prison". Naturally, regardless of how I tried, I never got a dime from the scum-bag, though I know he was working odd jobs, and making money. If he had been thrown in jail, I guarantee you he would have come up with the $1500.

I have no pity for those who owe a debt, and claim they cannot pay - it's nonsense. The MAJORITY can, and will pay, if faced with coming-up with the cash, or going to jail. It IS that simple.

December 26 2013 at 12:45 AM Report abuse -1 rate up rate down Reply
Sam

Here in Virginia we have the "Summons to Answer Interrogatories." It allows the creditor to ask the debtor about their assets. If the debtor fails to appear they can be arrested and jailed until they answer. I once worked for a lawyer who jailed a pregnant woman who failed to appear. She answered his questions and was released.
In my experience most debtors show up.

November 02 2012 at 1:55 PM Report abuse rate up rate down Reply
Glenn Youngman

I think people going to jail for not paying child support has set a precedence... you should be able to get anyone arrested for non-payment of a civil debt.

November 01 2012 at 12:52 PM Report abuse rate up rate down Reply
hugh10000

Simple. If you borrow the cash, be prepared to pay it back. Being indigent, poor, out of a job, etc. doesnt give anyone the right to screw money lenders. What burns me is that the courts are making the taxpayers support losers sent to jail for (not paying the debt) but not appearing in court. You cant ignore the court system. They'll come get you bad boys.

October 29 2012 at 12:09 PM Report abuse rate up rate down Reply
thesanantonians@

I started to comment , but it is a waste of time, ty

September 04 2012 at 2:36 PM Report abuse rate up rate down Reply
jimpeel

Doesn't being jailed for non-payment of taxes simply being thrown into debtor's prison?

September 03 2012 at 11:13 PM Report abuse rate up rate down Reply
nmgene

Ant time anyone twists the law they are commiting treason. This includes the courts. The DOJ under obama should be stopping this but no they only go after people who are doing right.

September 02 2012 at 9:45 PM Report abuse rate up rate down Reply
Leonard W. Giddens J

Don't bond out. Let the sorry SOB's take care of you with three hots and a cot.

September 02 2012 at 9:37 PM Report abuse +1 rate up rate down Reply