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

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* Steven Palazzo, Mississippi, Property Rights, and Eminent Domain

Time in prison is just one of many possible consequences of failing to pay your child support.  Recently I came across this on the U.S. Department of State website which states that if you are behind on “child support payments in excess of $2,500, you are ineligible to receive a U.S. passport. If this applies to you, Passport Services strongly recommends that you contact the appropriate State child support enforcement agency to make payment arrangements before applying for a passport.”  While I was in a sporting good store recently I witnessed a man being turned down for a hunting license, thanks to a new State mandated computer system that all licensees must adhere to. He was denied the hunting license because he is behind on child support. So you can’t hunt, fish, or even leave the country. It’s also been brought to my attention that the government can withold child support payments from your tax refund! Feel free to leave comments or questions at the end of this article.

In research for this article I interviewed my Aunt, whom was a Child Support Enforcement Officer.  Since 1985 she was an Employee of the State of Mississippi  but her position is funded by a Federal Program which insures that parents receiving government aid are financially assisted by the state mandated wage garnishment, of the non custodial parent.  These were time limited positions for child support enforcement.

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.

Polybabydadic

The majority of her time was spent in determining paternity.  This is how it works.  The mother gives a name, or five names (in some cases), and child support enforcement sets off to locate the potential fathers.  Once an address is obtained for these men, a letter is sent instructing them to come to the appropriate location for a paternity test.  Sometimes married men (or their wives), received these letters.  Once in the office the potential father could accept paternal responsibilities.  This was a rare occurrence. Normally the potential father would ‘deny’ that he is the father.

DNA Testing

DNA testing used to require the withdrawing of blood, but more recently ‘swabbing‘ has been used.  The baby, mother, and potential are all swabbed to obtain a sample of their DNA.  The DNA is then sent off to a laboratory and analyzed.  The mothers DNA ‘markers’ are noted and then subtracted from the DNA of the baby.  The remaining DNA should be a match with the real father.

Once Paternity is established, the father’s wages were assessed. There were guidelines for how much a father will pay.  It’s based on a percentage of his income per child.  If the father doesn’t have a job then the judge would set the child support based on a minimum wage job, at 40 hours per week.

Divorces

Mississippi passed a law in the 1990′s (which is often ignored) which states that all divorces involving children must have a child support withholding order.  A form would then be filled out by a Child Support Enforcement Officer and mailed to the employer of the non custodial parent. This was a wage garnishment form designed to help the government insure that babies in Mississippi are being taken care of.  Also, if the custodial parent is on some form of government assistance like Medicaid or Welfare, there is a state law which mandates the withholding order. This one is strictly enforced.

Licenses

Besides not being able to obtain a hunting or fishing license.  You could also be denied a Drivers License when you stand in line for one of these.  My Aunt relayed a story about a certain lawyer that would never pay his child support. The only way they could get him to pay was to threaten to remove his license to practice law. The Child Support Officer could use the same threats with a medical doctor.  The ability to disrupt the lives of the  non custodial parent seems to have no boundaries.

What if you leave the state?

Leaving the state won’t help you avoid paying child support.  You may prolong it, but you can’t avoid it by skipping the state. Thanks to the Uniform Reciprocal Enforcement and Support Act, your arrest warrant for failure to pay child support follows you anywhere in the United States.  For example, one of the arrest warrants my Aunt had issued resulted in a man being arrested in California.  He was driving a tractor trailer loaded with produce. Although this was a routine traffic stop, once the man’s license was entered into the police computer, his warrant for failure to pay child support in Mississippi popped up.  He was arrested and his employer’s produce sat in the hot California sun, spoiling before making it to market.

How you are tracked

The government tracks its citizens thanks to a few interconnected circumstances.  This tracking is made possible by your Social Security Number, which is really how the government sees its citizens.  Using your Social Security Number to obtain employment, results in a W-2 being issued to the I.R.S..  Large companies have to report this information every three months. Smaller companies may only report this information at the end of the year.  Thanks to the Homeland Security Act, this process most likely alerts them as well.  But the end result is that a Child Support Officer knows where you are, and if they’re aggressive, you’ll be arrested.

Time in jail

Time in jail is only pursued if the Child Support Officer has a father or mother who refuses to cooperate.  You won’t go to jail if you are trying to pay your child support (actually paying, not just talking about paying).  Once the Officer feels that they have wasted enough time trying to get you to pay, they have a warrant issued to bring you before a judge.  Sometimes they may just lure you to the court with a subpoena, without mentioning that you’re going to be arrested when you arrive.  My Aunt relayed a heart breaking story of having to place a mother in jail who wouldn’t keep a job and pay her child support.  Since the split with her previous husband this woman had given birth to another child.  Inside the courtroom, the mother was placed in handcuffs and escorted to jail, leaving her one year old behind crying.

Once in jail, you’re stuck there until you get a job.  Now I know this sounds crazy, but my Aunt said that you couldn’t leave jail until you could prove that you had a job.  Normally family members took care of this obligation for their incarcerated loved ones.  The Child Support Officer actually does the legal writing.  They have a lawyer at their assistance that really does nothing more than just sign whatever gets placed in front of their face.  So your life of freedom is really in the hands of the Child Support Officer.

The squeaky wheel gets the oil

My Aunt said she averaged carrying around 800 ‘cases’ at any one time.  Also, she would only make appearances in court once a month.  So she would try and accomplish all she could on that day. She made it very obvious, in our conversation, that the custodial parents who were the most assertive with her, took priority over people who compained little.  So if your Ex loves the idea of harassing you, expect to hear from the Child Support Enforcement Officer often.

Oh yeah, I almost forgot, it’s of no consequence for the female to have you in court as often as she’d like.  The judge always makes the man pay the court costs.

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.

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Getting arrested for debt is on the rise according to the Star Tribune in Minnesota. In a recent article entitled “In jail for being in debt” they examined the growing trend of getting arrested for not paying debt. Minnesota had 849 debt-related arrest warrants issued in 2009. So are your chances greater today that you’ll go to jail for not paying your debts?

**Disclaimer – Debtprison.net does not administer legal or financial advice. The contents of this website are my opinions on collection agencies and how to deal with them. Nothing on this website should be interpreted as legal advice or council. No opinions on this website should be used to replace the advice of your financial advisor or your legal council.

Despite the headline by the Star Tribune you won’t go to jail for simply failing to pay a debt. The real story is always more complicated. You could be arrested, but that has a lot more to do with ignoring the court than it does with ignoring your creditors. As I explained in a previous article, “Can you go to jail for debt?” – you cannot be arrested for simply not paying a creditor. Law enforcement works for the courts – not for creditors.

So why are these people getting arrested?

These debtors are being arrested for not responding to the court. If you owe me money I have a right to take you to court to force you to pay me. It’s been said that the squeaky wheel gets the oil. The same is true with our court system. If a creditor really pushes they can force you to show up in court and even get liens against your property or seize money from your bank account. And your failure to appear before the court can lead to arrest. You are actually getting arrested for not responding to the court. The court needs communication from you. If you cannot pay – the court needs for you to explain to them why.

Here’s how not paying a debt CAN lead to your arrest.

1. The creditor sues you in civil court for a debt.

2. The court hand-delivers a summons to you from the court indicating you are being sued and need to appear on the scheduled date.

3. You fail to show up in court or respond to the court summons.

4. The creditor then receives a default judgment against you for the amount of the debt.

5. The court mails you a statement indicating that a judgment was placed against you for the debt.

7. You ignore the statement and make no effort to contact the court or the creditor.

8. The court may then issue a bench warrant for your arrest (if the creditor is aggressive)  to force you to show up and explain why you’ve made no effort to satisfy the judgment (this is becoming more common).

It is possible that you never received the original summons (was given to the wrong person) and that you were unaware that a judgment was placed against you (because you moved or something).

It could also be that you were aware of these things and didn’t take them serious.

Either way you can end up getting arrested for not responding to the court.

Remember, the court isn’t interested in wasting everyones time and locking innocent people in jail. The arrest warrant was the last option for the court to force you to comply with the judgment that was placed against you. This doesn’t even mean that you will have to pay. It just means that the court needs some communication from you at least indicating that you are attempting to comply with the court’s judgment. A creditor has the right to determine why you haven’t tried to satisfy the judgment. And that can include the court questioning you about income and assets.

I had a friend that got into a fight with another dude at a candle store. Some merchandise was destroyed during the scuffle. As it turns out the other guy’s parents owned the candle store. So they sued my friend for damages of $1,200. My friend appeared in court and agreed to pay 100 per month until the debt was paid. After a few payments the parents told my friend not to worry about the rest of the money. This debt seemed to be gone until my friend and the other guy got into yet another scuffle. As a result, the parents contacted the court and said that my friend hadn’t paid them the four previous months and still owed them money.

My friend got arrested the next day for not paying the debt according to the terms to which he had agreed in court.

These tales that we hear about on the news of being ‘locked up for debt’ often omit many of the facts to lend emotional credence to the debtor. Just as my friend could simply say he was arrested for not paying a debt – though that certainly wouldn’t be the whole story.

Related Articles

* What is a Junk Debt Buyer?

* Restrictions on Wage Garnishment for Debt Collection.

* The Fair Debt Collection Practices Act

* 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