That Credit Card Debt Might Land You In The Big House

cutting up credit card

Photo: Flickr/jennmae

Outlawed in the United States in the 1830s, debtor’s prisons are somehow making a comeback now that regular folks are more vulnerable to financial trouble.Whether it’s inability to pay court fees as a criminal defendant or outstanding credit card debt, your unpaid debts can still land you in prison, even though the U.S. Supreme Court has said people cannot be imprisoned merely because they can’t pay up.

Deadly Circle of Debt
“Everyone is facing tightening budgets in a tough economy,” says Roopal Patel, a Katz Fellow in the Justice Program at the Brennan centre for Justice at NYU. “Courts are trying to fund their operations on the backs of the poor.

“People can be thrown in jail for failing to pay court fees and fines,” points out Patel. “A court is supposed to determine if someone is actually unable to pay, but in practice this is often a cursory or meaningless inquiry.” She says that the Brennan centre has interviewed public defenders who said that judges asked defendants “if they had cable television” or “if they smoked cigarettes,” and if they said yes, into the slammer they’d go.

“But this is an illogical revenue source,” says Patel. “The poor people going through the criminal justice system can’t afford their payments. And throwing them in jail results in unnecessary incarceration and ensures that they can’t find work to make any payments.”

Civil Debts Also Punished Unfairly

Roopal Patel

It’s a vicious circle that private companies are taking advantage of as well. “What you see more of now are people being thrown in jail for civil debt as well, not just missed court payments,” Patel says. “People may miss a few payments, for example on a medical bill, and a debt collection agency will file a lawsuit. But that agency won’t properly notify people of court dates – and then people end up in jail for missing court.”

Some states are making an effort on behalf of consumers. Illinois recently passed the Debtors’ Rights Act of 2012 to prohibit such practices. And there is the federal Fair Debt Collections Practices Act (FDCPA), but it only prohibits misleading representations.

Under the FDCPA, “a debt collection agency cannot imply that nonpayment of debt will result in the arrest or imprisonment – unless such action is lawful and the debt collector intends to take such action,” Patel says. “Since people end up in jail often for failing to [make] court appearances, and not the underlying debt, this [law] is sometimes not applicable.”

Letterhead Larceny
A recent article in the “New York Times” noted that prosecutors are even allowing debt collection agencies to use official state letterhead to scare people who allegedly write bad checks: They think they will go to jail if they don’t respond – to debt collection attempts that prosecutors haven’t even reviewed, much less decided to prosecute.

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Referring to that practice, Patel adds that the debt collection companies who go after alleged bad check writers also collect fees for a class on budgeting, “and some of that money goes back to the DA’s office. But then you end up with situations where people who committed no crime are being punished.”

What can you do if you think you’re being unfairly targeted with fees or debt collection efforts? “Consult with an attorney to determine if this lawful,” suggests Patel who in the same breath notes that this is an unaffordable option for many who are already in financial trouble.

You can also demand documentation of the debt: According to the FDCPA, within five days of contacting you, a debt collector must send you written notice of the amount of the debt, the creditor to whom it’s owed, and information about the 30-day period you have to dispute the debt.

Read more about laws relating to debt collection and your rights on

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