If you had asked me before today if you could get get locked up for having outstanding credit card bills, I would have said: Absolutely not. After all, debtors' prisons in the United States were abolished in the middle of the19th century. Unfortunately, however, a frightening and little-known occurrence is taking place in cities all across America: People are, in fact, being put in jail simply because they can't afford to pay their creditors.
This chilling article in the
Minneapolis Star Tribune details how common the practice is in various parts of Minnesota, and how it's also taking place throughout the rest of the country, too. For the most part, those getting thrown in jail for being in debt have two things in common: First, they obviously didn't pay their creditors as agreed. Equally important, though, they failed to show up at court hearings about their debts, which resulted in debtor warrants being issued for their arrest.
If you're being hounded by debt collectors, read my article '
5 Tips if You're Facing Court Action from a Debt Collector,' as well as another piece I wrote called '
Why You Should Answer a Summons on Debt Collection.'
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Debt Collection Horror Stories
No Way to Stop Them
AOL User ICANGELS Says:
"This company still calls my husband's work after receiving three written notices not to. Their representative also called our neighbors in her goal to embarrass us! They were calling my home up to eight times a day and hanging up on me, after I told them my husband wouldn't be home before 6:00 p.m. The problem? There's no way to stop them. They feel they are above the law and know there aren't any attorneys who will waste their time suing them."
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Debt Collection Horror Stories
Calling a Seven-Year-Old
AOL User SOCCERUTD Says:
"We had an unpaid bill because of a dispute in our retail business. Our sales rep doubled our order and then went on maternity leave, and [the company] said the only person who could fix it was her! A bill collector from Texas called over and over and I attempted to explain (the situation) to him ... The day before Thanksgiving he called and my daughter answered the phone -- she was 7 years old at the time. He said to her, 'Because of your daddy you are not going to be able to live in your house anymore and won't be able to have Thanksgiving there with your family, it is your Daddy's fault!'"
Debt Collection Horror Stories
Calling the In-Laws
AOL User Poolchick7 Says:
"These people are the worst. When they couldn't reach us about a car payment that was 10 days past due, they called our daughter's in-laws and left a message with them to have us call them back about a personal matter. We are talking about calling people whom I only see twice a year, and they somehow made a connection between my daughter, her in-laws and us. I can't think this is even legal!"
Debt Collection Horror Stories
Two Calls a Day
AOL User SBPFORD Says:
"I have been receiving calls twice a day from a collection agency. I ask them to send me a statement or something to file on insurance (medical claim), (and) they refuse. This bill is three years old and, they said, never filed on insurance. They call every morning around 9:30 and every evening about 8:30, seven days a week."
Debt Collection Horror Stories
Spiral Effect
AOL User RBettes941 Says:
"Do the credit companies and retailers realize they have created a spiraling effect on peoples credit? I have always had a score in excess of 750, and always paid my bills on time. Recently, due to my wife working on graduate school ... our debt to credit lines increased. We were at about 45% after (her) completion of school, then American Express dissolved our $25,000 credit line, which we owed nothing on. This moved our percentage of credit to debt to about 60%, and lowered our scores to less than 700. This caused other creditors to follow suit by lowering our credit lines, which then lowered our score again."
Debt Collection Horror Stories
Fake Debt Collectors
AOL User A114Sieb011 Says:
"I make six figures a year, my wife makes six figures a year, we owe no one a penny, yet I get daily calls from Palisades Collection saying to call them on a bad debt. I had, and the first thing on the recording is, 'Enter your social security number.' Yeah, right. I checked my credit report and there is no unusual activity. Palisades, quit calling you stalker."
Debt Collection Horror Stories
No Way to Stop Them
AOL User ICANGELS Says:
"This company still calls my husband's work after receiving three written notices not to. Their representative also called our neighbors in her goal to embarrass us! They were calling my home up to eight times a day and hanging up on me, after I told them my husband wouldn't be home before 6:00 p.m. The problem? There's no way to stop them. They feel they are above the law and know there aren't any attorneys who will waste their time suing them."
Debt Collection Horror Stories
Forgetting Their Promise
AOL User Gloqui5 Says:
"I got a phone call today from a credit card I couldn't pay 15 year ago. Back then I let them know that I just could not pay my balance of $300. They informed me that they would have to do a charge off, and it would show on my credit. They did, and it showed for seven years. Now 15 years later, they start calling and they want $600 or it will back on my credit. Can they do that?"
Debt Collection Horror Stories
Fake Lawsuit
AOL User Mnmkid221 Says:
"A collection company used city official names and paperwork to look as if I was being taken to court. However, when I called, the court knew nothing of the paperwork or of any lawsuit against me. It seems that the collection agency wanted me to panic at the sight of the papers and call the phone number provided on the 'official-looking papers.' Then they could terrify me and demand payment."
Debt Collection Horror Stories
Police Assistance
AOL User Deeannafrancis Says:
"I get a call that I am 49 days late with my payment, and it is now in collections. I told her I overlooked the December 15th bill, but I will pay it online right now. She loses it with me and screams at me that I can only pay her. I hang up, go online and make the $35.00 pmt. My phone rings again, I explain that I paid it online. After that, they put me on auto call for every 15 minutes for two days! The last phone call I got from them, I nicely asked her to hold, and I called the local police station. When I got back on the line with them, (I asked for) her name so that I could file a harrassment charge. She hung up and no one else called me."
Debt Collection Horror Stories
Hospital Scam
AOL User KMKiaski Says:
"Even though I had insurance, and it paid between $8,000 and $9,000 for a one night stay, I got bills for an additional $2,700 from the hospital much later. They said if I didn't pay it they would send it to collection, so I did. I later found out they regularly did this, charging more than the charge accepted by insurance and then frightening patients into paying that extra charge -- hey free money for them! A person I work with said the same hospital came up with several old charges years later."
Debt Collection Horror Stories
As I read the Star Tribune article, '
In Jail for Being in Debt,' my jaw literally dropped. The article profiled multiple individuals who've been arrested for unpaid debts, including three women: a 57-year-old patient care advocate who defaulted on a $6,200 credit card bill after a costly divorce, a 38-year-old restaurant cook who didn't pay a $250 credit card bill, and a 27-year-old new mom who had police show up on her doorstep when she was recovering from giving birth by cesarean section.
These women were and are not criminals. They simply could not afford to pay their bills -- like tens of millions of other Americans. It is absolutely outrageous that the legal system has now become an instrument of the overly aggressive debt-collection industry. It's bad enough that people who are truly unable to pay off old obligations get harassed by debt collectors, called at all hours of the day and night, and threatened with wage garnishments or seizure of their bank accounts. Now they have to worry about being incarcerated, too?
What about the 15 million Americans who are unemployed or the 40 million Americans who are now on public assistance? I guess they risk getting locked up as well just because they're broke?
A Call to Action
Concerned citizens everywhere should spring into action over this gross injustice. Here's what can be done:
- Call or write your senator or congressman and voice your displeasure.
- Check out the laws in your own state and inquire about whether "debtor warrants" can be issued where you live.
- Ask your local representatives to enact or change relevant laws concerning this area.
- Spread the word to those you know who might be impacted by this unfair phenomenon.
Unfortunately, in many cases, this new era of debtors' prisons is disproportionately affecting minorities and the poor. In fact, the
New York Times last year ran an op-ed piece noting that, in Gulfport, Miss., judges would routinely throw debtors -- most of whom were African Americans -- in jail when they couldn't pay their debts. That treacherous tactic allowed broke debtors to "sit off" their debts. In other words, those people had to do time as a way "pay" their debts. This onerous practice didn't stop until a lawsuit was brought against the city.
The Times called imprisoning those who can't afford to pay court-ordered judgments "
barbaric and unconstitutional." I couldn't agree more, particularly since so many individuals and families are currently facing tough economic times.
Throwing Debtors in Jail Affects Us All
There are some instances in which people flout the law and intentionally don't pay certain legally required responsibilities --- such as child support or taxes -- even when they can afford to do so. In extreme cases, these people can wind up getting imprisoned. But that's not what we're talking about. The cases highlighted by the
Star Tribune involve people who owe banks, credit card companies and other creditors such as collection agencies. Locking up individuals who are deep in debt simply because they are poor is cruel and unjust.
By the way, in case you're thinking: "Why should I care? I don't owe any money" or "Good, let them go to jail," you should be aware that this issue affects everyone, including you: As it turns out, taxpayers pay the cost for arresting and jailing debtors.
What do you think about this trend? Should local, state or federal law allow people to get put in jail for failing to pay creditors? And has this ever happened to you or anyone you know?
Lynnette Khalfani-Cox, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has been featured in the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Essence and Redbook to Black Enterprise and Smart Money. Check out her New York Times best seller
'Zero Debt: The Ultimate Guide to Financial Freedom.'
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Comments: (14)
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By: I must be bored! on 6/18/2010 7:27PM
To all who post their comment, all of you have valid points, but many may not know that, what is occurring in the world today, like traveling merchants ruining the earth, lovers of money... my personal favorite you should not put your trust in noble men, are all prophecies from the Bible!
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By: juana on 6/18/2010 8:38PM
Perhaps people will think about what they are doing before getting into debt that they know they cannot afford. This will stop people from living above their means, while taxpayers suffer at their expense. I'm not saying that everybody with a debt deserves to be locked up, but there is no reason to mortgage a 250K house when your income is only 50K.
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By: tyrebitre on 7/08/2010 12:32PM
" the New York Times last year ran an op-ed piece noting that, in Gulfport, Miss., judges would routinely throw debtors -- most of whom were African Americans -- in jail when they couldn't pay their debts. That treacherous tactic allowed broke debtors to "sit off" their debts. In other words, those people had to do time as a way "pay" their debts."
So, Ms Lynnette Khalfani-Cox, you are an award-winning financial news journalist and former Wall Street Journal reporter for CNB ? Really ? How ? Your article is fiction: if you bothered to actually read the NYT's article which you cite, one would discover that you are taking the liberty of changing "unpaid fines" into simply "debt", thereby using a partial "truth" to make your blatant lie into "sounding" true. While "unpaid fines" are a form of debt, not all debt is unpaid fines; yet, you twist the "facts" knowing that you twist them. You should be fired and banned by every legitimate news source.
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By: cstu on 7/19/2010 8:21PM
Debt collectors sell their souls to the devil, they are the lowest form of human expression possible, they are worst than used car sellsmen and attorneys. And I don't own any one a damn thing, that's for all of you who will say, "oh this person owes and has had a bad experience", NOT!. There practices of decieving, lying, making threats to people is unpresidented. I hope that people will not tolerate the "abuse" anymore. The problem is that you have to find an attorney to assist you, and to do this you have to have money, and if your bills are late then it's obvious that you can't afford an attorney. Nothing against an attorney, one of my best friends is an attorney, and I have accepted him for what he eagerly admits to be, "sent from HELL".
Now as for putting people in jail for bills, we have a jail, prison system that is currently at about 1.4 million. There is no place to put them, unless you build more new prisons. With the current socio-economic times, everyone, well almost, everyone is late or owes someone one. That's it, let's take the first time felon offender let them out and put that single mom or dad in that may have lost his or her job and can't pay their bills in prison. But then again, you will end up putting that felon back in because while in prison, he could not pay his bills. The the next time this offender gets out he, or she will have learned and increase his or her criminal activities in order not to go to jail for being in debt, he or she will just take the odds of being put back in jail for a new charge. That makes about as much sense as some of you that comment on this topic.
Geezs ...wake up people.. Oh..and my bad, I do owe $22 To my cable company, let's put me in jail. I would actually welcome the rest or the vacation, being that I work so hard every day, and can't afford a vacation.
Our society is going to hell and high water and we are talking about putting people in jail for debt? Again, if you are not a part of the solution, then you are a part of the problem.
Now, I have to go, my 5 year old son has just cleaned up his room and he's excited and wish to share that excitement with his parent.. Now, this is what life is all about...
Some of you sound like that judge that will say, I will give you 3 days to come up with a certain amount of money or go to jail. You don't have a job due to you being in prison or maybe you are disabled or on workman's compensation, that sometimes doesn't make a pay out for months. I ask what are you going to do... I tell you what they are going to do, they will victimize, you and me, it's there definition of "survival". Although I do not agree, I understand!
As for putting people in jail for being in debt, it will never happen,,it's the collectors that should go to jail! The sale there souls for $8 an hour. They are more detrimental to our society than most criminals...
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