Many people have emailed me asking if they could go to prison for not paying their credit card debt. It seems that some collection agencies are trying to intimidate debtors with the threat of arrest and imprisonment. A collection agency representative might comment “if you don’t start making payments on this we can take you to court and put you in jail.” There’s a lot of information on this subject and I will attempt to organize it in an intelligent manner. The correct answer to this question is - it depends! If you have any questions after reading this article please leave a comment at the bottom of this page.
See also all of my articles on Collection Agencies.
See also DebtPrison related article How to deal with Collection Agencies.
Failing to make payments on debt is not considered a crime in the United States. The U.S. hasn’t utilized a debtor’s prison since the 1850′s. Some countries will still place a debtor in prison for failing to make payments. However, the U.S. government has a vested interest in making debt a desirable circumstance, therefore debt is not criminalized. In order to go to prison you must be convicted of criminal behavior. Laws regarding these issues will vary state to state. See also DebtPrison related article How to settle your debts on your own.
Here are your options with debt you’re defaulting on:
1. Settle your debt (but you’ll need some cash).
2. File bankruptcy (an often nightmare).
3. Ignore it and possibly go to jail for contempt of a court order (very rare).
4. Start paying it back in full.
If you need immediate advice on bankruptcy or debt settlement, then please call 877-231-4384. This is a toll-free number. A representative will help evaluate your financial problems for free and can even connect you with a local attorney. You can also fill out our free bankruptcy evaluation form by clicking here.
What will most likely happen
It’s always been my understanding that your creditor can take you to civil court and obtain a judgment against you saying that you owe the debt. Through the judgment the collector can then garnish your wages or even get liens against your assets. But getting to this point of wage garnishment or liens against assets is time consuming and usually never occurs. That’s because the collector has to go through a process that I’ll explain later in the article.
Going to jail for contempt wasn’t something that I thought could occur, but then I’ve read some comments from my readers below. I’m assuming there’s more to the cases than just the average default. It seems that in some rare cases an arrest warrant can be issued for contempt of court. I think this is somehow related to your not showing up in court, but from what I’ve read these arrest warrants are very uncommon.
This was stated by Sherri below in the comments “They tried to take me to court in 2000 ish. I tried to set up a payment plan and the guy told me he would not allow a payment plan and wanted me to ask friends and family to pay the bill. This week I got a letter in from the sheriffs dept stating it was a warrant for arrest. The attached paperwork was showing a court date for 12/20/07. In which I NEVER received any paperwork stating I had a court date in Dec.”
And this was stated by Deb “I owe around 3,000 in credit debt, and a sheriff keeps banging on my door leaving me a note from the sheriffs dept, what the hell is this all about? And can they arrest me in my own home?”
I have no way of knowing specifically what occurred in the two above mentioned cases that led to the Sheriff’s Dept. getting involved. In general, the negative outcomes (negative credit reporting, wage garnishment, liens, or jail) often depends on the amount of money involved and the aggressiveness of the creditor. The more money involved (almost always in excess of $1,000) the more likely the creditor or collection agency will pursue legal action.
Usually the process follows these guidelines:
You have defaulted on your payments. Your creditors collection division calls you daily to try and talk you into making a payment. After a year or two they give up on the phone calls and letters. They can’t get you to pay so they (this could now be a collection agency, not the original creditor) sue you in civil court. This can happen even if you are in a debt settlement program. It’s a lot of trouble and expense for them to sue you, so normally they won’t bother unless they figure they can get some money out of you.
Keep in mind that there are rules that collection agencies must follow according to the Fair Debt Collection Practices Act. If they don’t follow the rules you can actually hire an attorney and file suit against them! For example, if they have your phone number, they are not allowed to call your family, friends, or employer (if you request them not to). Also, you can write a cease and desist letter which instructs them to only communicate with you via U.S. snail mail.
Scenario 1 – You don’t show up and the judge rules in favor of the creditor and against you. This judgment is an acknowledgement that you owe the money. I’ve read that 80% to 90% of judgments are never collected! This is because the judgment is usually just an acknowledgement that you owe the money, and that is all. In order to collect another court date must be assigned to perform a ‘writ of execution’. If they summons you for this, and you don’t appear, they may issue a bench warrant for your arrest.
A writ of execution is a common court order granted by a court in an attempt to satisfy a judgment obtained by a plaintiff. When issuing a writ of execution, a court typically will order a sheriff or other similar official to levy property owned by a judgment debtor. Such property will often then be sold in a sheriff’s sale, and the proceeds remunerated to the plaintiff in partial or full satisfaction of the judgment. It is generally considered preferable for the sheriff simply to confiscate money from the defendant’s bank account. If the judgment debtor owns real property, the judgment creditor can record the execution to “freeze” the title until the execution is satisfied.
If you don’t show up for this one you may be arrested for contempt of court. This is the part of the process where the facts will be laid out. This is the part where they get your employment information for wage garnishment or asset info for liens. But bear in mind, most collections will not get to this point. It really just depends on how aggressive they are on your particular case. And many people are actually in a position where they cannot be collected on. Perhaps you are disabled and on limited income. Chances are they can get a judgment but will never be able to collect. There is also a federal minimum (I think this figure is 30 hours of minimum wage pay per week), which if you make below, they cannot collect. For example, if minimum wage is $5.80 per hour, times 30 hours, comes to $174/week or $702 per month. If you make that or less they cannot touch you. Money that is in IRA’s, custodial accounts, trusts, annuities, and insurance contracts are often untouchable. See also, Restrictions on Wage Garnishment for Debt Collection.
Scenario 2 – You go to defend yourself against the creditor. You explain why you do not owe the money. Or you explain that you owe the money and cannot pay it because of personal circumstances. The judge may or may not rule in favor of the creditor. If you don’t owe the money or really can’t pay – just walk into court and defend yourself, you’ll be glad you did.
Please understand that the garnishment of wages depends on many factors such as: your level of income, possibly your spouses income may be considered, and the number of dependents you have. To read about someone’s personal experience in using debt settlement companies read Tell Debt Settlement Companies to Kiss Your Ass. If this article doesn’t convince you to stay away from these companies, I don’t know what will.
Can you be arrested at airport returning to U.S.?
I’ve seen this question come up quite often. Some people moved away from the United States into another country. However, they left behind tens (or hundreds) of thousands of dollars of debt. Now they need to re-enter the U.S. for a vacation or to visit family. They are worried about an outstanding arrest warrant related to the debt. If you are concerned about this possibility try performing an information search on yourself at a site like this one. Perhaps avoiding entering the state where you used to live would be a good idea. Now if you have a warrant for fraud (related to your debt) the possibility for arrest may carry a bit more weight since this is a criminal, not civil arrest warrant. Keep reading to learn more about fraud and other issues related to debt and jail.
Fraud
Also, if you obtained debt by committing fraud you can go to jail. For example, let’s say you just moved into a new apartment. Mail for the previous tenant is still arriving at your apartment. A credit card offer comes in the mail for the previous tenant. You fill out the application, mail it in, and start using this new credit card which is in someone else’s name. This is fraud and if convicted you could serve time in prison. This happened to my cousin. He moved out of his apartment and the following tenant received his mail and ran up thousands of dollars in retail charges. He had to get a lawyer involved and it took years to get this completely removed from his credit report.
Perhaps you have ‘borrowed’ your sister’s credit card to go out and spend a couple of grand without her knowing about it. In this case you could be fined and or imprisoned for fraud. This type of conduct is also considered criminal in nature.
You could possibly be looking at prison if you ran up thousands of dollars of debt on credit cards with no intention of paying it back. Recently the federal government changed the law regarding filing bankruptcy on credit card debt. The new law makes it harder to erase the debts you owe to credit card companies. Before this law went into effect, bankruptcy courts received a record number of new filings. Broke Americans were all trying to file for bankruptcy before the new law kicked in.
At the time I had an acquaintance that had in fact, filed bankruptcy on debts to various creditors, worth over $60,000. We were discussing the new law and he suggested that I run up tens of thousands of dollars in credit card debt. When the bills came due I would simply file bankruptcy before the new law took effect. Many people did exactly that. If the credit card company can prove that this was your intention, then some judges would find you guilty of fraud – taking out loans that you had no intention of repaying. However, it is usually difficult to prove that someone had no intention of repaying the debt. For example, if you applied for six credit cards, maxed out the limits for a total of $15,000, and then never made a payment, you could be in serious trouble. It would be obvious that your intent was criminal.
In general if it can be proved you received money or goods by deceptive practices you may be eligible for a criminal conviction.
You could also be imprisoned for the following:
If you violate a court order (a judgment against you to pay child support).
If you are convicted of willfully failing to pay your income tax to the government.
If you are attempting to hide assets or income to avoid paying a debt for which there is a judgment against you.
Bankruptcy related acts that can result in criminal penalties include:
If you defraud tenants
If you forge a bankruptcy judges signature
If you commit perjury during the creditor’s meeting
Keep in mind that there is a difference in a judgment (civil court decision about money you owe another party), and a verdict (criminal court conviction of a crime). In a civil court case the outcome will largely depend on the judge and his interpretation of the circumstances.
Simply defaulting on your debt is not a crime
If failing to pay your debts equaled prison time then half the people you know would be in jail. Even the author of this article, although my debt is caught up now and will be soon be paid off in full. Many people have lost their jobs or had unexpected medical issues force serious changes to their financial lifestyle. Through no fault of their own a debtor may no longer be able to make the minimum payments. This is not a crime and one cannot go to jail for these reasons. Like I said earlier, collection agencies will do anything they can to convince you to send them a payment. If you have credit card debts or medical bills that you can no longer pay, you can’t go to jail. This is why we have debt settlement, bankruptcy, and ruined credit scores.
Although you can’t go to jail for failing to pay your debts, there is a list of negative consequences you may be eligible for;
Collection Agencies can call your phone several times a day.
They can even call your place of employment, asking for you or where they can find you.
They can call your neighbors and ask them if they know where you are.
They can sue you in civil court for the balance of debt you owe them.
They can win a judgment in civil court against you for the debt owed.
Through the judgment they can garnish wages from your paycheck.
Through the judgment they can garnish your banking accounts.
They can (in some states) get a lien against your assets (house) and sell it to pay off the debt.
They can report the collection information to credit bureaus which lowers one’s credit score.
So the short answer is no – you can’t go to jail for simply not paying your debts, unless you are in contempt of court (very rare). But, creditors and collection agencies can make your life a living hell. So it’s in your best interest to get this situation handled in a manner that benefits you.
Remember that some debt collectors will scare you anyway they can to force you to pay up. The best advice I can give is to educate yourself about your options. Take the time to read information across the web about debt and collection. There are a lot of articles out there – most of them are accurate and truthful. Go forth and be debt free!
Protect your family — let a bankruptcy lawyer help you explore whether Chapter 7 bankruptcy or Chapter 13 bankruptcy will offer you the most financial clarity. The first step to financial renewal is completing this free evaluation form.
Related Articles
* Restrictions on Wage Garnishment for Debt Collection
* The Fair Debt Collection Practices Act
* Get Everything in Writing: Collection Agencies and Their Lies
* Reasons not to file Bankruptcy or Settle Your Debts
* Can you go to jail for not paying your debts?
* How to settle your debts on your own
* How to deal with collection agencies
* Sample Debt Validation Letter
* Information on Credit Card Balance Transfers
* How I Escaped Credit Card Debt
* What You Should Know About Credit Cards
* How to seek bargains for food and clothes
* Steven Palazzo, Mississippi, Property Rights, and Eminent Domain
Audrina,
Sounds like you’re pretty confused about what you’ve been paying on. In the future, make sure and get documentation and always know what you’re paying for. You need to take a few days and get all this straightened out. Try and calm yourself and get organized about these debts. Who have you been paying? What were you paying for? How much is left on that debt? What are the account numbers? Etc.
You need to make a list of each different account/debt that you owe money to. Figure out exactly who is in possession of that debt and how much you owe them. You need to do this with all of your debts so you are crystal clear who you are dealing with.
A bill collector doesn’t care who they are collecting money from or if that person is aware they’re paying on the wrong debt. A bill collector works off commission based on how much they collect. And it’s pretty much a free-for-all lying game for the uninformed debtor.
Barry
UPDATE:
The paper that I mentioned in my first post about me being a bill collector coming after me for being on my mom Jeep that was repossessed luckily came out to not be it at all. I was looking through hers and my Credit Reports and saw where they said she only owed a little over 2k for it, which more than likely they won’t come after her for that small amount. So I looked closer at the paper and realized it was for the same amount as the other Debt Collectors (Hosto Buchan Prater & Lawrence) took us to court over… $7,200 for a Repossessed Mustang. So I called the Company that the letter was regarding , Santander Consumer USA. I told them I was already taken to court over the Car and they Stated that they never sent anyone else besides the one mentioned on the letter. They told me to Contact that one I was paying and ask them who they were and where was the money going too. Well the lady that I’ve been talking too now claims that they are collecting for a credit card that was in my moms name. On her credit report it stated she had $0 balance and didn’t owe anything. So I then told the lady from Hosto Buchan…. that I was going to need all the receipts since I’ve been paying, which they kept telling me they’d send them and I need ALL information regarding the account that they have on us and too I told her I’d call her back when I looked over everything else. Well, not to my surprise, when I went to call back, they wouldn’t take my calls, I left numerous messages for them to call me back and now, 4 days later, they still haven’t. Another payment was supposed to be sent to them by tomorrow, but because of them not responding back, only makes me question whether they were even legit to begin with. That or they illegally went after my mom for some extra cash in their pockets. I’ve sent them $1k already, thinking it was going on paying back my Mustang and now I found this out. How did the Lawyer they sent, have all the information on my repossessed car in the court room and claimed it was from Citi Financial Auto, when it was , from what they recently came up with, a debt on a credit card?? I
I’m really hoping I can take these idiots to court because I WANT all the money I have sent them and I’d love to see them go down!!!
….Any ideas???
Parisin,
I really don’t know… the procedures are different state to state. Here in Mississippi we go before a judge and each side presents their facts. That’s what I’d expect you to experience. Just make sure you’ve got your facts and budget together and you’ll do fine. If it’s already made it to this point in the collection process I would think you couldn’t make payments to the original creditor, though you could certainly call them and give it a try.
Please come back and give us a follow up report on what happens.
Barry
Thanks again for your advice!
I basically created a personal budget yesterday and came up with being able to pay them $150 / month. I was wondering if it was possible for me to call Capital One today and try and settle it today instead of going to court tomorrow.
What should I expect when I go to court tomorrow with this warrant? How long will the hearing be and will I actually go in front of a judge? I’ve heard / read many different things and I just want to be prepared.
The debt with Capital One is most likely around $3000 now with all of their fees, interest, etc but the limit was $1500 from what I could remember.
Thanks again for your help
Stacey,
Anytime a collector starts using words like “special investigator” and “court date”… while at the same time refusing to send you anything in the mail… relax… they are just bluffing you. The following is a good video which shows how the bill collectors do it.
Never give them any information over the phone. And call the original creditor directly and ask them if you can just make a payment to them. Try and bypass this collector all together.
Your debt is a pretty small amount and isn’t high on anybody’s radar… which is why they are using these border-line illegal tactics to collect the debt. They probably don’t even have their paperwork together… if they did, why not just mail you an official notice of the debt?
Next time they call, tell them you are requesting validation of the debt, as your right under ‘federal debt collection laws’. Tell them not to call you again until they have provided you with validation of the debt via U.S. mail.
Barry
Parisin,
You should go to court but be prepared. I wouldn’t file bankruptcy yet. Do you know what debt you are being sued for? How much is it? Can you afford to make monthly notes on it? How much income do you have left over each month? These are the questions you need to ask. Besides filing bankruptcy may not help you any as the laws on bankruptcy changed in the last few years.
http://debtprison.net/wordpress/1306/understanding-the-changes-to-bankruptcy-laws/
Basically you need to know what the debt is about and how much they claim you owe. I wouldn’t simply walk in and say ‘yes’ to everything their lawyer says. In fact, I would ask for documentation of the debt and the amount they claim you owe. I would then explain to the judge that you were not aware they were trying to contact you (as you hadn’t received anything) and that you need a chance to review the documents and possibly seek legal council of your own.
Anyhoo, just don’t agree to anything you cannot pay. If you don’t know what you are paying for then don’t agree to anything. If you do agree to pay, make sure it’s a payment you can actually make each month. That’s general advice based on what I know about the details of your debt… which is very little.
Barry
Thanks for your help! I just called the district court and the clerk verified that it was in deed valid and that there had been three attempts via mail to get this resolved. They had the right address so I dont’ know why I never got the other notices but they were sent regular mail like this one – my roommate gets the mail because she is home every day and has the same first name as me, maybe she misplaced it, who knows.
However, i thought you had to have a summons to be brought to court. I never received a summons and when I mentioned that to the clerk she said there wouldn’t be one, just notices. I thought that was really weird. She said that the attorney’s are “reasonable” guys (ha!!!! somehow I doubt that) and that I would have a chance to speak to the attorney when I show up at court and explain that I never received the notice.
Any suggestions for me? I’m a little overwhelmed and now I have to reschedule an interview I had just set up yesterday and I have no idea what to expect etc. I asked the Clerk if there was anything I needed to bring, etc even mentioned the Financial form to show income, expenses etc that I had learned about online. She said no, just the warrant notice.
I emailed an attorny last night that I am going to call later on during my break from work but I’m just really scared. I’m thinking of doing emergency bankruptcy to stop all the harrassment I get from this and other creditors.
Thanks again for leanding an ear to my issues…. I was up until 3am trying to figure out what to do….
I keep getting phone calls from a collection agency that says I owe their client 1300 dollars and I am to go to court. I even had a special investigator call and leave a message. When I called they would not let me talk to the original creditor only through them. They insisted on me paying them and giving my info over the phone. I asked for paperwork to be sent and they refused. They keep on talking about a court date but I have not seen anything in the mail about it. I am scared and nervous and don’t know what to do. I recently lost my job. I don’t even have money for a lawyer.
Parisin,
First thing in the morning, get on the phone with the court you think mailed you the letter and go from there. Those types of warrants are normally produced to bring someone who owes money to a creditor into civil court. It could be that a creditor sued you in court a while back, got a default judgment against you (cause you failed to show), and is now forcing you into court to discuss payment option or something along those lines.
Either way get on the phone in the morning and get it figured out. It may be legitimate. I’ve been running this blog long enough to not be surprised anymore when weird things happen.
Come back and let me know what is happening.
Barry
I just got a notice (unsigned) saying it was a Capias Arrest Warrant from Somerville District court in Massachussetts. It is in regard to credit card debit in civil court.
It gives a court date and time – only three days from today! – There is no signature and it came through general mail with no proof of receipt.
There is no signature, just saying I have to show up to court at a certain date and time and to call a certain number to talk to a certain Constable. However, there is no signature and the number on the “warrant” is not the same as the one for the district court.
I’m very scared and I’m not sure its real or not because I had read that it needed a signature to be valid.
I am so confused and I’m not sure what to do at the moment!
Please help
THANKS!!!!! Me and my mother will be sure to talk to a Lawyer this week about all this. Thank you so much for responding! You are the first person that has actually helped!
Oh and about the Repo, no we never talked to a Judge because their Lawyer told us it’s be easier and less stress on us if we saw him directly, face to face before the Judge came out. So the Judge never even saw our case and now I wish he had…
Audrina,
I have no legal advice but here’s my opinion for what it’s worth.
Anytime someone is coming after you for SEVERAL thousands of dollars, and you aren’t experienced in dealing with bill collecors, then you need to hire a lawyer. They can often save you a lot of money and stress.
First off, on the Jeep, if you never signed the loan, then they cannot come after you on that loan. You should have copies of the loan agreement, and even have a loan #. If so, you need to find out who the bill collector is and where their office is located. I’d write a simple letter stating that you are not affiliated with loan # ***** and for them to cease immediately attempting to collect such a debt from you. And that for them to continue to attempt such an illegal collection will be considered fraud and defamation of character. You will then have no choice but to contact the Secretary of State in the state in which their office is located and possibly pursue legal action against their company.
I would mail the letter registered with return receipt (this way you get proof from the post office that they actually received your letter).
Now in regards to the repo debt. Repo is a funny business. Often the company already got their money out of the car and are just coming after you for the interest that they would have received over the life of the loan.
So did you make an agreement with the collectors attorney or did you plead your case to the judge? In your case I would have talked to the judge. Your Mom is on the hook for the debt and they always come after the co-signer because they are ones, usually, most able to pay back the money.
If you are still on the hook for the $7,000 then you need legal council. Go and talk with a local lawyer in your hometown and see what your options are.
After a review of your case, you may end up owing nothing.
Let me know how it turns out.
Barry
I have a question involving a car being repossessed… I can’t find any help on this so I’m hoping that it’s ok for me to be asking you…?
back in 2006 or around that year I had bought a car from a local car lot. The car was financed through Citi Financial Auto. When I signed for the car, I signed as the buyer and my mom signed as the co-buyer. Well, when the first payment came, it was in my mother’s name. So I called them and told them I wanted it switched to my name because not only was I the Buyer, but I was the ONLY one paying every month. I payed regularly and on time till 2008 when I suddenly lost jobs. (I’m a house cleaner) I tried getting help with payment arrangements, which they did help somewhat, but after they’d lower the payments for a few months, they’d shoot them back up without letting me know. I tried asking if they’d refinance because that was the 2 car i had regularly payed on through them and they refused. I was pretty much in a battle with them till mid 2010. I told them I didn’t want to lose the car because not only did I need it for transportation, but I knew losing it would’ve put me in even more debt… and it did.
A repo man showed up looking for the car at my mom’s and threatened to put out a warrant for both me and her if we didn’t surrender the car. She called me and I told him to come and get it. A day later, I went home (after getting back from a week long trip) and found a letter from Citi Financial Auto stating that they’d help me with the payments and all I had to do was call. You can just imagine how upset I was at that point because the car was just repossessed the day before. I then called them and they told me there was nothing they could do because it was in repossession already..
Anyways, to get to the main problem, a collection agency now is coming after mom for over $7,000 for the car. They don’t even have my name anywhere on the car, which I don’t understand?? I called and told them I signed as the buyer and they refuse to change the name and told me if I wanted it done, I’d have to hire my own Lawyer.
They’re making me pay $250 a month and I only make, if lucky, about $400-$450. When they took us to court over this, their lawyer (fore the judge came out) told us that if we wanted to settle it fast and easy to see him at that time so we could leave. We did so because, well honestly, just didn’t think it’d make a difference. I, at the time, had the original paper showing that I signed as the buyer and my mom as the co-signer. Plus we had proof showing neither of us make enough to pay $250 and not struggle over doing so. If I had that kind of money to spend a month, I’s still have my car right now.
Now we have a whole new problem involving my mothers jeep that she had to give back because of her too losing jobs. I NEVER signed any papers on it but they have me as the co-signer on it and these people are trying to come after both of us on that!
We both are to the point where we’re beyond confused and feel like we’re going in circles because no one wants to help….
Do you have any Legal Advice for us?? Is there anyway we can have these Agencies back off or at least settle for less payments a month? Although to me, neither Company deserves anything because they treat us like dirt!
I hope you can help, but if anything, I thank you for reading this.
Alsamont,
Thanks for the thoughts. I may actually use your comment and turn it into an article. A ‘featured post’ on the front page of the site.
Of course I’ll have to break it up into paragraphs
Barry
I have always taken credit and debt obligations seriously and have had a sterling credit history. Then my wife and I had a perfect storm of financial problems befall us which caused us to fall behind in some credit card debt, debt owed to the IRS, and our mortgage payments. We have always been very high earners, but also, unwisely, have over-spent and under-saved. In order to deal with our mortgage bank and the IRS, it was necessary to file for a chapter 13 reorganization. What surprised both of us was how well behaved the collection people were, although a lot of that is due to changes in the law. Some of the people I spoke with were actually friendly, sympathetic, and non-judgmental. However, I did have one interesting experience with an in house collection agent. When we previously refinanced our house, the new loan was made by the same bank that held the original note, but a different arm of the company. The new loan was a cash out refi and required that the old loan be paid off. I had decided to let my last payment on the old loan lapse by a couple of weeks beyond the grace period, knowing that it was going to be paid off in full from the proceeds of the new loan. Because of a delay in processing the new loan, we began to receive very forceful calls from the in-house collection officer who wouldn’t listen to anything I said. He just kept asking me when he could expect my payment. Every time I would explain the situation with the new loan, that they would be receiving the payoff funds within a day or two, and that the new loan was from the same bank, he would keep asking me when I would be sending them a check. It became very clear that these people operate within a very narrow range of programmed comments and responses. Our conversations became very heated to the point that he threatened me with physical violence to which I responded in kind. It just happens that I enjoy physical and verbal altercations and told him to bring it on. I finally just had to stop taking his calls as I knew the payoff was imminent and the guy just wasn’t going to listen to me. The point of this is to tell people that they don’t need to be intimidated by these jokers and when they cross the line regarding propriety, call the manager to report them. Or call an abuse hot-line. You are also not required to take their calls or to even have an active phone line in the house; you only need to provide them with a mailing address where you can be reached. As long as you have provided them with an up to date address where they can contact you by mail, they are legally barred from being able to speak to neighbors, friends, family, or workplace. People just have to learn what their rights are. People also have to stop allowing creditors to define them as deadbeats or other pejorative labels. There has been a discernible shift in America, as part of a pro-business and increasingly powerful banking and credit industry lobbying effort in Congress to brow beat and intimidates consumers into believing that they are powerless against these forces. The three credit reporting agencies are a good example of this; just peruse internet forums devoted to credit issues and you will see that this is true. Banks, insurance companies, and investment companies have gotten to the point where they have seemingly eliminated nearly all the risk and shifted it over to the consumer. This situation will only worsen until consumers take back their rights. Ironically, we seem to have more consumer protection efforts in place than ever before; however, these powerful business entities have become so emboldened that they either ignore the laws or get Congress to weaken the very laws that were passed to prevent abuse in the first placed. Americans just have to wake up and see that our freedoms are being lost because they have joined in a silent conspiracy to trade control over their own lives for the illusion of a material happiness fueled by high debt, a new luxury car every three years, unnecessarily grandiose homes, endless supplies of fancy processed foods and fast food restaurants. We are now beginning to see the ugly underbelly of American style capitalism that enslaves a middle class culture besotted on a misguided belief that the crumbs of a wealthy over-class will somehow make their way into the pockets of individuals self-deceived into believing that they too will one day become “rich.” It is unfortunate, and not widely understood, that it is the nature of this über class of American “nouveau riche” to disdain those earth crawlers believed to be beneath them. It’s the classic case of the last admitted into the “club” takes in the welcome mat. This attitude is especially puzzling when coming from the “Christian Right” when one considers that these self-anointed übsters want nothing to do with this narrow minded, religiously motivated hoi polloi whose value is solely in their mindless allegiance to conservative causes which, ironically, can be counted on to keep these same folks in their proper place. It is, therefore, contingent upon the middle class to try to seek greater understanding of what it is that truly makes us great as a people, separate and apart from those ideologies that would divide and weaken us. There is never anything wrong, in and of itself, to aspire to, and achieve, wealth. It is only what we lose of ourselves, individually and collectively, in the pursuit of that wealth, that needs to be laid bare and subjected to our utmost scrutiny. We must each ask ourselves these questions: Am I my own person? Do I turn a blind eye to the actions and manipulations of others in order to get ahead, knowing it to be morally or ethically wrong to do so, for personal and material gain? Do my actions cause harm to others? What do I consider to be reasonable wealth for myself and my family? After the needs of my family and myself have been met, how can I best use my excess wealth to make those less fortunate than me better? Do I always “vote my pocketbook” or do I go beyond myself to consider the issues that affect all Americans when I cast my vote? Do I try to see the “larger picture” by educating myself on the facts rather than accepting popular belief, following the crowd, or voting the party line? I appreciate everyone’s understanding here. If I have erred in judgment or if someone disagrees, that’s good, as long as it contributes the dialogue between thinking individuals. We aren’t always going to agree and , in fact, don’t need to nor be able to. It’s only in the trying that it matters. If this writer seems to be implying that rich people are bad, I’m not. Contrary to what Nick Carraway said, that “The rich are different from you and me,” rich people can be just like anyone else; good, bad, or indifferent to the world that spins around them. It’s always about the choices we make, how those choices affect others, and how we want to be remembered when are days are at last counted to their fullest. Stand up, be your own person, don’t be bullied, love your neighbor (even when he’s behaving like a jerk), spread some of that “moolah” around, if you got any to spare, and don’t discount the idea that you “are your brother’s (or sister’s) keeper. To make America, or the world, a better place to be doesn’t need to be all that difficult and we can do it regardless of whether we live in a red state or a blue county, a coastal urban center, or the flat farmlands of the Midwest; whether we are the “great unwashed,” the “hoi polloi,” the top 3%, the bottom 10%, the right, the left, the crazy, the brainy, white collar, blue collar, or as the TV commercial states, no collar at all. We are all Americans and there are forces at work today in American that would pit blue against red, rich against poor, and divide and conquer the middle class. Just keep in mind that it is the great American “Middle Class” from which the wealthy rise and to which the poor rightfully aspire. Let’s set an example for the rest of the world and for ourselves as well.
Tim,
Absolutely not true.
Barry
Dear Debt prison, Question???
It’s true? You own your own debt (it does not belong to creditor). The bank/creditor can not sell your debt to a collector agency or third party without your authorization.
Mason,
I am not familiar with the details of bankruptcy law. I would start by talking with a local lawyer that you trust. I would discuss the debt problems and if he/she thinks bankruptcy is a valid option.
Barry
Selly,
If you haven’t already requested validation of the debt then I’d do so first.
http://debtprison.net/wordpress/49/sample-debt-validation-letter/
If you are beyond the point where validation would do any good, I would simply go to court on the assigned date (when they sue you) and explain to the judge your circumstances. I would go from there based on the decision of the judge.
Barry
I owe $1100 on a credit card (more than half of that amount is interest & “fees” that built up over a short time) I don’t have any assets, other than making a payment on a car which I still owe 7k on. I don’t have a job & haven’t had one for over a year. I am not married, but I live with my boyfriend & his father. I have a joint account with my boyfriend but he doesn’t make that much monthly. I got a letter from a law firm (from the collection agency the debt got passed onto) saying they will sue within 30 days if I do not respond to the letter (and even if I do, they will continue to attempt to collect the debt by suing)
What can they do to me? Like I said, I have no assets, no money & I am not legally married so money from a “spouse” can not be accounted for.
in reply to your to your comment i also have about 3000 in medical bills total its about 10k in debt. My parents said it would be in my best interest to file bankruptcy?? would i be able to keep my house if i do this?
Mason,
In this case, with an amount this high, I would consider seeking legal council. You may end up on the hook for the full $5,700. Whatever the outcome though, I really think you’d be much better off if you sat down with a local lawyer and discussed this matter. A lawyer might can help you get the amount reduced. That’s where they come in handy. They can also help negotiate a payment plan (if it turns out to be necessary) that you can deal with.
DP
hi i have a question i hvae been summond to civil court by a creditor for a debt of 5700, i dont no what to do im scared as hell. i’m affraid they will try to take my house or garnish my wadges, when im already living pay check to paycheck with my wife and son. It says date on it is feb11 2011 and i just got the letter from the courts on march 9th 2011 saying i have 28 days to decide or something?? it says if i fail to appear and defend judgement by defualt will be rendered against for the relief demanded in the compaint?? what does all this mean there was no date to appear??? please help
If I’m reading this correctly you broke a contract and left a debt of $7,000 that may or may not actually exist if the company rented out the property to someone after you moved. This would be a civil matter, not a criminal one and there’s nothing to be concerned about with immigration. I’ve never read anything, anywhere, that has ever indicated a blemish on a credit report is related to your not being able to travel internationally – unless you are in Dubai. You aren’t a criminal… you just broke a lease agreement. If there is nothing on your credit report at this time then that would seem to be a good thing. It could be that the company decided not to report the breach of contract (and may never report it). Or it could be that it will appear at a later time. You can check your credit report at http://annualcreditreport.com every four months. I see no reason why you cannot move to Canada, nor how this debt could follow you there.
**Also, make sure not to fill out any credit applications as this will automatically update your credit report as to your most recent life data. Creditors often check on your credit report to get your new address, phone number, etc.
Hmm, your articles are very informative, but that’s just the thing. I don’t know how to go about this mess I’ve gotten myself in, I really can’t tell fact from fiction very well.
Basically, due to personal issues, my sister ran off on me and left me by myself to pay the bills on our apartment. This didn’t sit well with me, because I barely made enough to actually pay them off every month, my sister and I split the bill.
When she left, I went to the company that I had gotten the lease from and explained the situation. I asked if there was a smaller lump sum I could pay instead of the roughly 7k I would owe if I left. They told me no, that I had to pay the whole thing or rent it out to someone else. That didn’t work well with me either, cause I was flat broke and did not have enough to pay even the next month.
Needless to say, I ran off, and went to live with my parents until I felt I was in better mental health. I cleaned out the apartment of food and other crap before I left, but left everything of value I had in there for them. It included a 32 inch flat screen TV a new couch, and a computer. Yeah, I know, not much of value, but it was honestly all I had. Now I work and barely get $600 a month (less than 30 hours a week…)and I still have nothing of value, no car, no house, nothing except this laptop. I doubt it’d even sell for $100. :c
Strange thing is, the company hadn’t put anything on my credit report. I haven’t heard a peep out of them. Granted, I did not inform them of where I went or even my new phone number as I was in so much stress at the time, but still. Is this the calm before the storm, or did they just decide to let me go? (that I highly doubt but I dunno, its kind of a small company, it’d hit them in the wallet pretty hard to track me down and such) How would I be able to tell if anything showed up on my criminal history for this? D:
This is just so frustrating, its not a matter of me not knowing how to spend money (i haven’t missed a payment since I moved and never spend more than I absolutely need to, never had problems up until that issue) its my inability to respond when under stress or pressure, and my inherent dislike for paperwork and bull. >< I would be more than happy to get this out of my hair so I can move to Canada to be with my love in peace. Speaking of which, would this affect my immigration? o.O;