Imagine this scenario: You’ve got thyroid cancer, and you stop paying your bills while you’re going through treatment. You’re a mother of three, and you need to lean on other family to help support you during this difficult time. While you’re recovering at your parents’ home, you miss notices in the mail about your amounting pile of debt. It turns out they were notices for court hearings, and three warrants have been issued for your arrest.
Sound unreal? It’s not.
Although debtors’ prisons haven’t existed for nearly 200 years, some of the practices of the long-ago past are in effect in one way or another today — namely, private debt collectors. These people prey on those who are in debt, whether they owe a few dollars on late bills or much more, and they’re using our criminal justice system to force debtors to pay.
According to a recent report by the American Civil Liberties Union (ACLU) titled “A Pound of Flesh: The Criminalization of Private Debt” about 1 in 3 Americans has had a debt turned over to collections. That’s 77 million people, many of whom have been arrested and sent to jail for their debt. This crisis impacts black and Latino communities the most, the ACLU says, because of longstanding gaps in poverty and wealth.
Can I be arrested for my debt?
In short, yes. When debts become criminalized, a judge issues a warrant for a debtor’s arrest. This can be because he or she failed to appear in court on unpaid civil debt, but they may not have ever received notice to appear or of the lawsuit itself.
More than 6,000 debt collection firms exist in the U.S. today. Creditors will hire debt collectors, who then go on to file lawsuits seeking repayment. More than 95% of collection lawsuits end on the side of the collector, according to the ACLU, as most debtors do not defend themselves in these suits — either because they didn’t know about them, had to work, had to take care of a child, were ill, had a disability, or no transportation.
Thousands upon thousands of arrest warrants are issued each year related to debt issues, which range from unpaid student loans to utility bills. The exact number is unknown because these debt arrests aren’t tracked as arrest warrants by courts.
In some cases, debtors have been arrested for debt as little as $28, the ACLU found. Arrest warrants have been issued in more than half of U.S. states, including California.
From Threatening Letters to Creditor Lawsuits
The ACLU estimates that more than 1 million consumers get a threatening letter from a creditor every year. More than 200 district attorneys’ offices across the U.S. allow private collectors to use their seal and signature on repayment demand letters, further compounding the threat and confusion over debt.
Of the 1,000 cases the ACLU reviewed of people who were threatened with jail or actually jailed for their debts:
“Many were struggling to recover after the loss of a job, mounting medical bills, the death of a family member, a divorce, or an illness. They included retirees or people with disabilities who are unable to work. Some were subsisting solely on Social Security, unemployment insurance, disability benefits, or veterans’ benefits — income that is legally protected from outstanding debt judgments.”
Key Recommendations from the ACLU on Debt Practices
The ACLU has called these debt practices “abusive,” with concerns on due process, human rights, and equal protection. Unfortunately, the regulation of debt collectors needs to be vastly improved.
Some key recommendations from the ACLU after its report include:
- State legislatures enacting laws that prevent arrest warrants being issued by courts in debt collection lawsuits;
- Judges also should not be allowed to issue arrest warrants in cases of contempt or failure to appear in relation to debt collection;
- District attorneys should not contract with private debt collectors;
- States attorney generals should oversee district attorney contracts regarding debt collection practices, sue companies engaging in unfair debt collection practices, and in general, enforce consumer protection laws.
Borowitz & Clark agrees with these recommendations and supports ending unfair debt collection practices, debtor arrests, and harassment by creditors.
Get Help Paying Off Your Debt
Most people struggle with debt for years before seeking help. Debtors who are stressed out from threatening creditor letters, phone calls, and more shouldn’t have to face the possibility of one day being arrested for their debt. For some, a Chapter 7 “liquidation” bankruptcy, or Chapter 13 repayment plan, may be one of the most effective ways to stop creditor harassment, get rid of your debt, and get on with your life.
If you are considering debt settlement, debt negotiation, or bankruptcy, we may be able to help. Borowitz & Clark has assisted more than 40,000 individuals in the bankruptcy process in the Los Angeles area, allowing people to catch up on their mortgages and keep their homes, reduce their monthly payments, stop wage garnishment, and more. Contact us today for a free bankruptcy consultation.