Americans Being Jailed For Not Paying Their Bills

| by Michael Allen

Federal imprisonment for unpaid debt has been illegal in the U.S. since 1833, but  collection agencies are using harsher methods to get their money, ushering in the return of debtor’s prisons.

NPR reports that it’s becoming more common for people to serve jail time as a result of their debt. Many borrowers facing jail time don’t even know they’re being sued by creditors.

Here is how it works. A company will often sell off its debt to a collection agency, generally called a creditor. That creditor files a lawsuit against the debtor requiring a court appearance. A notice to appear in court is supposed to be given to the debtor. If they fail to show up, a warrant is issued for their arrest.

More than a third of all states now allow borrowers who don’t pay their bills to be jailed, even when debtor’s prisons have been explicitly banned by state constitutions. A report by the American Civil Liberties Union found that people were imprisoned even when the cost of doing so exceeded the amount of debt they owed.

The Wall Street Journal reports that since the start of 2010, judges have signed off on more than 5,000 arrest warrants since in nine counties alone.

Beverly Yang, a legal aid attorney, says many debtor’s and judges don’t know debtor’s rights, which results in the accused being intimidated into a pay agreement. She’s seen judges interrogate debtors about why they can’t pay more and whether they are trying hard enough to find a job.