The New Debtor's Prisons: How Debt Can Result In Jail
I wrote a blog last year entitled “New Check Fraud from Cash Advance Scam.” The basics of the scam are: A debt collector will identify themselves as an investigator investigating the debtors for check fraud arising from a payday loan. The collectors threaten jail unless the debt is paid. In the blog, I wrote that the statements are false as there are no criminal charges for simply not paying debt; debtor’s prison was abolished in the United States in the 19th century. Well, while that is all true, there is a sad trend that debt has a key to the jail’s back door.
Today I saw a popular search article on MSN entitled “Jailed for Debt”. The article summarizes several incidents where not paying debts have resulted in people being arrested. But if debtor’s prisons were abolished, why are debtors being arrested? The answer is either debt collectors are abusing the system or debtors are not giving proper attention to legal documents. The fact remains that you cannot be jailed simply for not paying debt. However, when debtors fail to follow court orders, contempt of court can land you handcuffs.
So how does this happen? It can happen in several ways, sometimes the debtors could have prevented the actions by proper attention but other times the debtors have no warning whatsoever. In any case it all starts with the debt collector filing a lawsuit against the debtor. Whether or not the debtor can prevent the potential contempt arrest depends on the conduct of the debt collector after the filing.
When a lawsuit is filed against you, you are entitled to due process which starts with being served a copy of the lawsuit. In most cases, proper service requires that you be personally served but be mindful that this can occur even if someone else who resides in the house and is at least 14-years-old accepts service. If reasonable attempts to personally serve you are made but not effective then service may be made by publication in the newspaper.
Once service is made, the debt collector will file a document with the court. The document will either be a return of service or affidavit of publication. Believe it or not, sometimes unscrupulous debt collectors will file one of those documents without even attempting service; these are the cases where a contempt order can occur without warning. If a contempt order comes when the debtor’s are properly served it is probably because the debtor did not give proper attention to the lawsuit either because the debtor was too stressed or scared to deal with it or because they did not recognize the debt collector and thought it was a mistake.
If you are served with a lawsuit you should not ignore the situation; you have rights and must assert them in the case or you loose them. If you do not respond, the debt collector can get a default final judgment and the court will order you to identify your assets. When you fail to do so, the debt collector can request that the court sanction you with contempt which can result in an arrest warrant and, subsequently, land you in jail.
The moral of the story, take all legal actions seriously and consult with a consumer defense attorney as soon as can after being served. If you are in the unfortunate situation where an arrest warrant is already issued, there are still actions that can be taken to have it set aside and perhaps even claims you can raise against the debt collector and you should consult with an attorney immediately.
This Blog was written by Attorney David Fineman, Esq. of The Dellutri Law Group, P.A. Mr. Fineman practices Bankruptcy Law, Fair Credit Reporting Act Law, Fair Debt Collection Practices Act Law and in other areas of Consumer Law.
