Posted on 08/31/2012 7:20:00 AM PDT by ex-Texan
To most of us, "debtors' prison" sounds like an archaic institution, something straight out of a Dickens novel. But the idea of jailing people who can't pay what they owe is alive and well in 21st-century America.
According to a report in The Wall Street Journal, debt collectors in Missouri, Illinois, Alabama and other states are using a legal loophole to justify jailing poor citizens who legitimately cannot pay their debts.
Here's how clever payday lenders work the system in Missouri -- where, it should be noted, jailing someone for unpaid debts is illegal under the state constitution.
First, explains St. Louis Post-Dispatch, the creditor gets a judgment in civil court that a debtor hasn't paid a sum that he owes. Then, the debtor is summoned to court for an "examination": a review of their financial assets.
If the debtor fails to show up for the examination -- as often happens in such cases -- the creditor can ask for a "body attachment" -- essentially, a warrant for the debtor's arrest. At that point, the police can haul the debtor in and jail them until there's a court hearing, or until they pay the bond. No coincidence, the bond is usually set at the amount of the original debt. * * *
(Excerpt) Read more at dailyfinance.com ...
I agree with you- per my other post, if the debtor shows up for the hearing he won’t go to jail.
“I’m not buying this ancient debtor’s prison crap.”
That’s right. You don’t go to jail for debt. You go to jail for contempt of court.
All a judgment debtor has to do is show up for the hearing and explain to the judge’s satisfaction in reviewing the pertinent statute why s/he hasn’t paid as ordered in the judgment.
If it’s a citation hearing, for failure by the debtor to appear at an initial hearing, the debtor must give a good reason for “thumbing his/her nose” at the court.
The judgment creditor must satisfy procedural due process: providing (to the debtor) notice of hearing and an opportunity to be heard.
If the creditor can show satisfaction and the debtor blows off the citation hearing, or shows up and says, “Yeah, I can afford to pay but I won’t.” then s/he goes to jail for contempt of court.
“Nose-thumbing” and financial irresponsibility is the hallmark of the Democratic party, led by Obama. Let’s leave the emotional histrionics to them.
If someone owes you money you expect to be paid; if you owe money, suck it up and pay it or explain why you can’t.
Having said all that, above,
some judgment creditors should be taken outside the courthouse, tied to a tree and then flogged.
But I don’t think this remedy for abuse of legal process would fly in this century.
Someone needs to hit Corzine with this.
They’ve been doing this for years to divorced fathers who legitimately cannot pay child support.
This.
When I read the thread title, I assumed that was what it was going to be about.
Professional bill collectors are generally the scum of the earth, but that said, there's nothing ignoble or immoral about wanting to be paid money that other people owe you. The entire basis of society would crumble if people were not obliged to pay legitimate debt.
Nonsense - our debts are backed by the full faith and credit of the United States Marine Corps. :)
I had a very good paying job for many years, +70k per year, and didn’t carry a huge amount of debt but I did have a mortgage, a home equity line of credit, a car lease and some credit card debt but all that was manageable and well within my means while I was working. Up until the time when I lost my job, I had an excellent credit rating and a stellar record of on time payments.
Then in 2008 I lost my job. As I had been under contract as an “independent contractor” at my last job, I was not eligible for any unemployment benefits so when my contract was unexpectedly terminated, I had zero income. I had a good amount in my emergency savings funds and I used that to pay my mortgage and other bills as I looked for work. I contacted all the credit card companies to work out reasonable payment plans; tried to negotiate lower minimum payments or defer payments for a time, but all I got was threats and abuse and harassment on a daily basis from most of them. I was trying to do the responsible thing and worked hard to keep afloat but when my savings was running out and I had to make the choice of paying my mortgage and utilities and eating (beans and rice and ramen noodles BTW) and paying my cc debt. Guess how I ended up prioritizing that?
I was able to sell my house but in a short sale (only about $2,000 dollars under what I owed BTW) so I walked away with nothing. I voluntarily turned in my leased car so all I had left was some cc debt and a debt to the IRS for back taxes on my self-employment income for the last two years that I will probably be paying for with penalties and interest for the next 15 years. I moved in for a time with a relative while I tried to get back on my feet and saved to buy a used car so I wouldn’t have to continue to borrow my neice’s and saved to move into a modest apartment.
But the cc companies were relentless, all raised my interest rates and raised the minimum monthly amount due to the extent that even though I was working again, there was no way I could pay them what they were demanding that I pay them. I tried to negotiate terms, sent them $20 or so bucks a month, but by now most of them had sold the debt to third party debt collectors.
Unfortunately some of these 3rd party debt collectors often try to skirt or operate outside the law, like making threats, calling after hours and calling and harassing people at their workplace. For instance I got calls from one debt collector trying to collect an $800 cc balance who told me that “you must have friends or family who you could borrow money from, if not, you must be one sorry and miserable excuse for a human being with no family for friends” and “you obviously aren’t starving to death, so if you can find money for food, you can certainly find money to pay your debt” and “I’m calling you on your cell phone, so if you can find money for a cell phone, you can certainly pay me at least $200 a month” and “don’t you have any furniture or jewelry you can sell? And I don’t give a good flying F**k about family heirlooms BTW. F**k you and your mother, if you have anything worth anything, your need to sell that s**t”
Seriously. I wish I was making this up but I’m not.
As much as I really wanted to pay off my debts, the daily harassment and abuse was not worth the effort and so in 2010, I declared bankruptcy. It was the best thing to do under the circumstances but I hope to never have to do that again.
she’s a smoking piece...piping red hot
The very same can be said of "natural foods".
Even God considers debt cancellation the right thing to do on occasion. Under Moses, every 50 years the year of Jubilee occurred, in which all debt was cancelled among the people of Israel. This discouraged long-term debt formation by either lender or borrower. Israel was to be a free people, and generational debt tends toward slavery.
Yes, there are irresponsible people who try to game the system, but an honest credit reporting system, with no PC biasing, would filter them out quickly. But otherwise good credit risks, who have encountered an unexpected and near total disruption of their ability to pay, should not be looking at jail time for circumstances not under their control.
And as I am an attorney, I can confirm that there definitely is a path to jail for those unfortunates who are otherwise fine individuals but really can’t pay certain bills. Child support, for example. If you get a judge who instinctively doesn’t like you, failure to pay (per a court order), even if you appeared, is contempt unless proven otherwise, and can put you in jail at the blink of an eye. I’ve seen it happen.
Yes, there are ways to forestall it, maybe. But these people don’t know, and judge knows they don’t know, and he can push them hard, if he’s of a mind to do so. There’s no requirement for a court appointed attorney, because contempt for failure to pay is a civil, not a criminal, offense. No protection, especially if you happen to be male. Truth.
Once I waited with my client while a judge told this poor bedraggled street person he’d better come up with the support, or else, and he told him he didn’t care how he got it. I can only guess what course of action that suggested to such an individual. The system is crazy. One of those areas where if you believe the worst, you’re probably right.
That’s nothing. Check this out:
https://www.acecashexpress.com/~/media/Files/licenseRates/TX_FeeSchedule.pdf
792% baby.
Technically but if the bond is always what the amount of debt a person owes, I think a higher court would side with someone arguing this is de facto debtor’s prison.
“Our corrupt Congress — both Dems and Repubs — amended the Bankruptcy laws to permit all sorts of ancient outrages.”
When a bankruptcy petition is filed all judgments against the debtor are reversed provided those debts were properly documented during the filing, so any civil cases against the debtor would be dismissed completely.
Yes, indeed. A man doesn’t have the money to pay the full amount and also doesn’t have the money to pay a lawyer to even try to get the amount reduced to the severely diminished income level. So, off to jail for “contempt of court”. I served 96 days of a 180 day sentence before I could borrow enough money and get a hearing which got me out. The ex actually owed me more money than the amount of the arrears because I wrote the check to buy her a car in the better times, but I never got a promissory note - because I knew she’d never pay me back anyway.
Your story is remarkably similar to mine.
Lost my job in 2008, had no unemployment, drained savings and retirement trying to keep paying the bills.
Our problem was the 2nd mortgage not Credit Cards, (we had an 80-20 originally). They would not negotiate, even though I called them when I first lost my job and asked them for help.
The house foreclosed, they sold the debt to a collections agency, and they were ruthless. Drove me into bankruptcy as well. They left me no choice.
One thing I learned from that. The day you loose your job, your creditors become your enemy. It’s about survival of your family at that point, and they don’t care.
They don’t care if you spend every penny you have saved to try and stay current, when it runs out, they will take everything they can even if it means you and your wife and kids are out on the street.
My advice to anyone, if it happens to you, quit paying all debt. Use your savings to survive off of, because in the end, it will all be gone anyway, and you’ll get no help from them, when your savings is gone, any more that you would if you just cut them off from the first day you were out of work.
What I find amazing is this: People who lose their job seem to focus on everything except finding another job. Read any account and there is always infinitely more said about paying bills than finding work.
Do you have a job, now?
I don’t think you quite understand how the interest calculations work. The legal “fine print” mentions “125% interest” because lending regulations require the rate be advertised as an ANNUAL rate. Payday loans are literally for days.
You take a $100 payday loan for 30 days (125% annualized rate), would pay a total of $110.42 at the end of the 30 days. That would actually be WAY below the norm for such loans (and yes, they are predatory).
A far more common cost is over 400% interest - which would look something like this:
You need a loan for 15 days of say $400. You write a check to the loan place for around $460. At the end of the 15 days, the lender deposits your check for $460. If you don’t have the money, you can often “roll over” the debt - by writing a check for the $460 plus new fees (well over $540 total)...
Yes, it is still predatory. But if a payday loan place is advertising $125 interest, that is way low in the realm of these places.
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