Debtor’s Prison – Jailed For Not Paying?

Bankruptcy laws were enacted in part as anurl

alternative to jailing people who could not

pay their bills.

Of late, there has been a big increase in the number of people in jail for not paying something.

Usually, it involves a debt to the government, punishment imposes as part of a criminal sentence.

But not always.                                                                           (image credit: Wikipedia)

As if out of a Charles Dickens novel, people struggling to pay overdue fines and fees associated with court costs for even the simplest traffic infractions are being thrown in jail across the United States.

Critics are calling the practice the new “debtors’ prison” — referring to the jails that flourished in the U.S. and Western Europe over 150 years ago. Before the time of bankruptcy laws and social safety nets, poor folks and ruined business owners were locked up until their debts were paid off.

(from Fox news story linked to in quote)

What Are People Being Locked Up For?

Each state has its own criminal law.

Often, part of a criminal sentence is to repay the victim, or, the government, for the cost of drug tests, probation supervision, court appointed attorneys, and so on.

Criminal penalties are NOT dischargeable in bankruptcy.

Worse, some courts hire private collectors, who, of course, charge their fees on top of what is owed to the court.

Unfortunately for the courts, the statistics indicate that locking people up for not paying fines is a net money loser.  That is, the cost of finding and jailing folks is more than what those who are NOT locked up are paying to avoid incarceration.

The Supreme Court has repeatedly ruled that you CANNOT be locked up for not paying something, even a criminal fine, which you lack the ability to pay.

Can I Be Locked Up For Not Paying My Credit Card?

In a word, no.

However, in Michigan, a creditor who has sued and obtained a judgment against you can get an order from a court that you appear for an examination, under oath.  The creditor can ask questions about your finances, bank accounts, income, other assets, to help it collect on its judgment.

Now, if you do NOT appear for such an examination, the creditor can get a show cause order from the court that issued the judgment, for you to appear to show cause why you missed the exam.

If you FAIL to appear for that hearing, a warrant can be issued for your arrest.  A so-called bench warrant, as it is issued by the judge from the bench.

So, technically, the arrest warrant is for failure to appear, but it arises out of a civil judgment for not paying a debt.

Filing bankruptcy DOES stop this process.

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