Posted on 03/19/2011 12:28:14 PM PDT by Palter
Some lawmakers, judges and regulators are trying to rein in the U.S. debt-collection industry's use of arrest warrants to recoup money owed by borrowers who are behind on credit-card payments, auto loans and other bills.
More than a third of all U.S. states allow borrowers who can't or won't pay to be jailed. Judges have signed off on more than 5,000 such warrants since the start of 2010 in nine counties with a total population of 13.6 million people, according to a tally by The Wall Street Journal of filings in those counties. Nationwide figures aren't known because many courts don't keep track of warrants by alleged offense. In interviews, 20 judges across the nation said the number of borrowers threatened with arrest in their courtrooms has surged since the financial crisis began.
The backlash is a reaction to sloppy, incomplete or even false documentation that can result in borrowers having no idea before being locked up that they were sued to collect an outstanding debt. The debt-collection industry says such errors are extremely rare, adding that warrants usually are sought only after all other efforts to persuade borrowers to pay have failed.
Earlier this month, Washington state's House of Representatives passed by a 98-0 vote a bill that would require companies to provide proof a borrower has been notified about lawsuits against them before a judge could issue an arrest warrant. All 42 Republicans voted for the legislation, which is expected to pass the state's Senate and be signed into law by the governor. A trade group representing debt collectors supports the bill and says the changes are needed because some companies are abusing Washington's existing law by improperly arresting borrowers.
(Excerpt) Read more at online.wsj.com ...
We do not have debtor’s prison in this country. You cannot throw people in jail for owing money.
Tell that to people who owe child support.
This is a sizable debt. He could be in jail a long time. : )
I forgot about child support. I was really thinking about credit card debt or house payments.
True deadbeats buy rich lawyers to keep them out of jails.
The warrants are issued not for owing money but for not appearing in court or for ignoring a court order.
This may seem to be a difference without a distinction, but it’s ultimately a form of contempt of court.
Jack
“We do not have debtor’s prison in this country. You cannot throw people in jail for owing money.”
Debtor’s prison is still alive with the IRS and family courts.
Isn’t the usual penalty for failing to appear a default judgement? The creditor can then seize your assets.
Indeed that is the normal case, but in theory, a bench warrant can be issued for failure to appear for a civil action as well as in a criminal case, although bench warrants in civil actions must be rather rare.
Jack
The issue is that the debt collectors are not having people served ,, the same thing is happening with foreclosures ,, it’s so much easier to win if the other party never shows up. More than one foreclosure mill has been caught with multiple postage meters ,, one with the correct timestamp and another one with a missing or altered stamp.
It's called "sewer service" and has been a problem for a long time.
Jack
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