11 Jun Prison And Unpaid Debts
An Eastern European immigrant asked me the other day, “Will I go to jail if I dont pay my debt?” I chuckled and reassured him that there are no debtor prisons in the United States. He told me that he thought he was safe, but that a credit collector told him hed be thrown in jail if he didnt make a payment on the debt. Now, Ive been in the bankruptcy business for long enough to have heard everything, and I occasionally would have clients relay similar stories. However, there was always this part of me that found such claims of obvious illegality, falsehood and abuse hard to believe. Well, today, in my local paper, appears two stories on this very subject.
First, Barbara Surk of the Associated Press reports that, in the United Arab Emirates, debtors ARE sentenced to prison for failing to pay debts. According to the article, more than 1,200 people in Dubai’s central jail about 40 percent of the prison population have been convicted of not repaying money borrowed from banks. In the United States, bankruptcy relief affords a debtor the opportunity to wipe out certain debts and restructure other debts to slowly pay them back. In Dubai, however, a person jailed for such a financial default is likely to remain there even when the sentence is over until a relative, charity group, wealthy businessman or even a member of the ruling family pays off the debt.
Secondly, as reported today in an article by Times-Union reporter David Bauerlein, Jacksonville leads Florida in investigations into unfair or unlawful debt collection practices. Specifically, Floridas Attorney Generals Office recently won a lawsuit against a Jacksonville collection agency because it threatened consumers with arrest if they didnt pay their overdue loans. Similar agencies in the Jacksonville area have recently been convicted of illegal collection activities such as impersonating attorneys and police officers.
So, even though there are many unpleasant things that are associated with being in debt, a debtor will not be thrown in prison for defaulting on a loan . . . at least in the United States of America.
Latest posts by Chip Parker, Esq. (see all)
- Can I Lower My Car Payment in Bankruptcy? - April 15, 2017
- How Will Bankruptcy Affect My Credit? - March 28, 2017
- Will the Mortgage Forgiveness Debt Relief Act be extended? - January 18, 2017
- How will my bankruptcy affect my spouse’s credit? - February 15, 2016
- Bankruptcy is an excellent retirement strategy - January 15, 2016