Can You Go to Debtor’s Prison in the United States?
October 13, 2009
I wrote in a previous article how dismayed I was that debtor’s prisons are actually alive and kicking in the USA in 2010. They don’t call them debtor’s prisons any more–they call them federal prisons or state prisons. There are four ways you can be sent to a debtor’s prison in the United States, for a federal debt, for child support, for contempt of court regarding a judgment, for not paying state fines, and if a judge decides that you have the means to pay any debt (including credit cards and bank loans) but just aren’t paying up. That means a judge might decide that paying your debts is more important than paying your mortgage.
- Child Support. People who pay their child support don’t go to jail, but if you are one of the many who refuse to pay, a Child Support Officer may recommend jail time until you pay up. In order to send you to prison, an arrest warrant has to be served though beware–you may be served an innocent looking subpoena to lure you to court with the intention of arresting you the second you step in the courtroom. Once in jail, you’re stuck there until you find some way to pay up. That means raiding your bank accounts, selling your household goods, or proving that you have a job. In case you think that this only applies to deadbeat parents and not you–think again. This case highlights a Georgia man who spent a year in jail for not paying child support–and he wasn’t even the child’s real father!
- Taxes. It goes without saying that you can be sent to prison for not paying your taxes. However, not filing is worse that filing and not paying once you have filed. Penalties for non-filing are worse than not paying your taxes after filing. The penalty for non-filing is a whopping 47.5% interest (composed of 22.5% for filing late plus a 25% penalty for not filing in the first place). The time limit for hunting down tax evaders is ten years, and seeing as everything now requires a SSN (thanks to the Bush administration), the IRS can, and will, find you. Just type prison for not paying taxes into Google and you’ll find thousands of cases of tax evaders making the news. Of course, there are many thousands more of average Joes who go to jail don’t make the news.
- Credit cards and other consumer debt. Lawyers and collection agencies will find ways to make you pay up, including the threat of prison. While not paying on a debt is technically not a crime in the United States, there are many cases where innocent people have been sent to jail because they didn’t pay debt. That almost happened to me, and my debt was a very simple one (an insurance company got a default judgment against me). I want to be clear that I was in no way criminally responsible, this was a simple civil matter than concerned my insurance company stating that I was responsible for a house fire because I left a pan unattended on the stove. (You can read the nitty gritty about that in this article).
What happened to me can happen to you: the collection agency took me to court and won a judgment. The judge ordered me to turn over my financial documents–including my bank account numbers. I had to do this as I was threatened with arrest and contempt of court. After I turned over the documents I went to see a lawyer and told him I did not want to pay this unjust debt. He told me that it was common practice for judges to throw out arbitrary numbers–like $3,000–and give people 24 hours to come up with the money or face arrest. These people are forced to turn over their mortgage payment, go without food, or borrow from relatives to avoid jail. The sheriff’s department gets involved; a policeman friend of mine told me that on “slow days” they just take the latest batch of arrest warrants and go out to see how many people they can find. - Not paying state surcharges. In certain states, like Texas, there are laws on the books to punish you if you don’t pay motorist fines. People convicted of traffic offenses like DWI, driving without insurance, or even plain old speeding are being hit with surcharges (up to $1,000 per year). Motorists who do not pay the surcharges are hit with an arrest warrant. That’s according to attorney Paul Kennedy, who writes about the comeback of debtor’s prisons on his blog.
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[...] How Long Can You Go Without Paying Your Bills? February 8, 2010 Being in debt is not the nicest thing in the world. It can get you down and it can even cause medical problems such as stress, depression and sickness. If you have bills which you are having problems paying and you are worried about them, then there are ways in which you can resolve your debts. Not a lot will happen for the first few months of missed payments. A lot of people who owe money to creditors worry that they will be thrown in jail but this very rarely happens. This doesn’t mean it won’t happen: Here are a few notable examples of when you can end up in jail for money problems. [...]