America's new debtor prison: Jail time being given to those who owe
18 replies, posted
[QUOTE]Debtors prisons were federally abolished in the United States in the 1800's, yet in certain states, they seem to be making a comeback. Out of Minnesota come disturbing reports of Americans being thrown in jail due to outstanding bills -- sometimes for as little as $85. The Star-Tribune of Minneapolis profiles a number of people who say their debts got them jailed, including Joy Uhlmeyer a 57-year-old patient care advocate who was pulled over on her way home from visiting her elderly mother and put in jail for a night for missing a court hearing about unpaid debt.
The Star-Tribune reviewed the state's court documents and found that arrests like Uhlmeyer's are up 60% in Minnesota over the past four years. And Minnesota isn't the only state where this is happening. It's a turn of events Ed Mierzwinski, consumer program director at advocacy group U.S. Public Interest Research Groups (or PIRG), calls a "very bad situation for consumers." Mierzwinski attributes the practice to "bottom-feeder debt collectors [who] are very aggressive."
People who are imprisoned for their debts are technically locked up for contempt of court after failing to appear for a hearing pertaining to their debt. It's a legal loophole that debt-collection companies are increasingly using. Here's how it works: First, the collections company files a lawsuit against the debtor, which requires them to appear in court. If the debtor doesn't show up, the creditor wins a default judgment against them. This allows them to ask the court to schedule another hearing at which the judge can go through the debtor's assets and determine if actions such as wage garnishments or bank account seizures can take place.
If the debtor doesn't show up to that hearing, the hammer of justice can come down hard and fast. From there, the judge can order the debtor in contempt of court and issue a warrant for their arrest. If this seems unnecessarily punitive, the price to get out of jail is even more so, say consumer advocates: Generally, the judge sets the cost of bail at the amount of the disputed debt, an amount which is then turned over to the creditor.
"This is the private use of government resources to collect debt," Pete Barry, partner at law firm Barry & Slade LLC, told Walletpop. One of Barry's clients was arrested at her workplace for not filling out and sending back a form demanded by the creditor. The client, Barry says, suffered the humiliation of having to have her boss come to the jail and post a bond before she could be released. The bond money, he added, was turned over to the creditor. "They're using the court system as their collection agent," he says.
"There are big issues," says Ira Rhinegold, executive director of the National Association of Consumer Advocates. "Minnesota isn't the only place it's happening, but it seems to be the worst. They're leading the way," he says, noting that NACA has heard similar stories out of Wisconsin, New Jersey, Arkansas and Washington.
Rhinegold tells Walletpop that some unscrupulous debt collectors never even send debtors the required notification that the case is being taken to court. Then the debtor fails to show up and the collector wins a default judgment, which can pave the way for imprisonment until they post their bond.
What's behind all of this? "In some ways it stems from the growth of the debt buying industry," says Rhinegold. Collection agencies buy debt for pennies on the dollar, then hire lawyers to chase after even the smallest amounts. Of all of the unfair aspects of this chain of events, advocates say the most galling is that, in many cases, consumers may not even be legally responsible for the debts for which they're being jailed. In fact, the debt may not even be theirs, the amount may be inflated by penalties and attorney's fees, and it's almost certainly been written off by the original creditor -- who then resold it for pennies on the dollar to a debt-collection firm that plays hardball to get money from consumers. Often, says Rhinegold, the collector doesn't even have the paperwork that would prove that existence of the debt. In these cases, the judge will dismiss the case against the debtor. All the debtor had to do was show up for their day in court.
For this reason, Gail Hillebrand, financial services campaign manager at nonprofit Consumers Union, says it's vitally important for consumers to respond if you get a letter threatening legal action and requiring a court appearance. The name of the collector can change because of how often debt is resold, she warns. So if you have an outstanding debt, don't assume that a notice that seems to come from a different company than the original lender is junk mail. "The problem is that people don't realize what it is," she says.
It's important to do some research first, though. If the debt isn't yours, you can dispute it. Even if it is, showing up to court can sometimes lead to an outcome in your favor if the collector can't prove you owe the debt. Either way, it will keep you from being hauled off in handcuffs.
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Source: [url]http://www.walletpop.com/blog/2010/07/15/americas-new-debtor-prison-jail-time-being-given-to-those-who/[/url]
I live in NJ :ohdear:
Surely a debtor prison would be more expensive? Also, this is very penalising to the poor, and makes me worry for your country.
Looks like history is repeating itself.
Again.
This could only lead down a bad road. Jailing ones whom cannot pay for there bills where they can't access a source of income is plain ridiculous.
What the hell happened to those limitations on debt collections? Did the collection agencies buy off politicians or something?
I remember when we did that.
It was called the Middle-fucking-Ages. Haven't they ever watched Robin Hood those heartless bastards?
greedy fucking pricks are already rich.
[editline]03:37AM[/editline]
what more do you want from us?!
The title is totally misleading. People are being put in jail for not showing up in court.
Fantastic, the rich get richer and the poor get screwed over like fuck. You go, Capitalism!
[QUOTE=HolyCrusade;23953224]The title is totally misleading. People are being put in jail for not showing up in court.[/QUOTE]
someone needs to read the thread. it amounts to a catch 22 situation.
[QUOTE=Dolton;23953178]I remember when we did that.
It was called the Middle-fucking-Ages. Haven't they ever watched Robin Hood those heartless bastards?[/QUOTE]
Don't forget about the 19th century. That's where the term "debtors prison" originated.
Hey, we're turning into 17th century Britian. We fought to get away, lived to become it again.
Okay so this is confusing, how are they going to pay for it, Taxes? for unpaid debts?
[QUOTE=BoopieDoopie;23954063]Okay so this is confusing, how are they going to pay for it, Taxes? for unpaid debts?[/QUOTE]
Because it'll teach them a lesson.
Banks are serious business.
At least it's not a pound of flesh.
capitalism at its best
This is pretty fucked up and somewhat scary.
[QUOTE=Dolton;23953178]I remember when we did that.
It was called the Middle-fucking-Ages. Haven't they ever watched Robin Hood those heartless bastards?[/QUOTE]
Robin Hood is an asshole. Stealing isn't okay, even if it's from some rich guy.
Sounds all good to me. Don't show up for court, you go to jail. Nothing new.
[QUOTE=Ragy;23955075]Sounds all good to me. Don't show up for court, you go to jail. Nothing new.[/QUOTE]
[quote=OP]
Rhinegold tells Walletpop that some unscrupulous debt collectors never even send debtors the required notification that the case is being taken to court. Then the debtor fails to show up and the collector wins a default judgment, which can pave the way for imprisonment until they post their bond.[/quote]
Can't show up for something you don't know about.
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