Ill. lawmakers target practice of jailing debtors

[SweetGeorgia]

My understanding is that people are being jailed for contempt of court, such as not answering post-judgment discovery. We actually filed right around the time we would have been in contempt of a court order to answer that kind of discovery. I looked it up and found that filing bankruptcy does not necessarily stop that sort of collection action (!). It's possible to sit in jail on contempt of court even after filing bankruptcy. But thank dog it's not common.

I am just furious that creditors can get around honest-to-god priority payments - like child support - with this crap.

[AngelinaCatHub]

Florida is geographically in the South, but culturally, definitely not the Deep South. I lived in Mississippi for 3 years, and believe me, it's a whole different thing!

Yes Woeisme as well as Jacko. I lived in good ole crooked Chi for about 8 years. I've lived in our Mill town about 45 and graduated in Clearwater FL. Then and now the true Floridians are inland in small towns. The Orlando is not even of this World and the coasts are either Cuban Yorkers or Mexicans but not Floridians. The true Florida is a mix of Spanish (from Spain) Minorcans, a mix of Seminoles or Timucuans. Then there are rednecks. We lived in Houston for a year and never saw a cowboy hat. Came back home and went to a Holiday Inn bar and that was all you could see.

Our area is "salt of the Earth". Farmers, cattle, potato, cabbage and unfortunately not too many tourists. We need the green here. So, there is a difference in Florida as in many places it truly is the deep South. 'Hub

[BankruptinNJ]

My wife sent me a similar article on this topic just yesterday and is sufficiently freaked out. We live in NJ-what are the chances of this kind of nonsense flying here? So far things have been pretty standard...BofA sent me to collections already, Chase just sent me a "warning" letter stating that my account will be going to collections in 30 days, and Citi has been pretty quiet. My wife has accounts with BofA and Chase that she only defaulted on two months ago so they're not even calling yet.

When I received a notice from lawyers that they were suing me over a debt, I ignored it. (My life was in total turmoil at the time, what with working full-time, preparing my pro se BK, moving to a new place and trying to apply for Medicaid so that my mother with Alzheimer's could got to a nursing home).

They received a judgment against me and I ignored everything. I just never responded to any court documents. I barely even bothered to READ the documents (probably not a good idea). I finally filed BK a few months later.

I've never heard of anybody in NJ being jailed for any of this.

[treehugger1]

As with a great deal of modern journalism, small 5-second shocks are what matter, not the details of the story.

I don't doubt a debtor can be found in contempt of court for failing to appear at a court ordered hearing such as a debtor exam. You ignore hearings at your own peril.

Would a judge in my state (Oregon) order a debtor to make payments? Possibly, but only up to the point of the debtor's exemptions. As always, it would be up to the debtor to attend the hearing and clearly point out any exemptions. For instance, if a debtor is already being garnished 25% of wages or a higher percentage for child support or past taxes, the judge cannot reduce the legal exemptions allowed the debtor.

I have never heard of anyone being jailed in my county for contempt of court related to debt issues. Good god, we can't even afford to keep second and third tier felons in jail, because the county does not have enough money to operate the jail at more than 50% capacity.

The real question related to this debtor/judge issue is to ask, "What constitutes contempt of court in my local court system?" If you educate yourself in this manner, you should not expect too many surprises such as bench warrants, jail, etc.

[GoingDown]

Sheesh! There is a lot of misinformation about this issue.

I read about this on a debt collector forum, and all they are trying to do with this new law is require that all debtors be served the official notification about a debtor's exam by a process server, rather than by mail. Debtors were ignoring the mail and ended up in contempt because they blew off the debtor's exam, because they didn't even know about it.

Arizona already has this law. If you are a judgment creditor and you want a debtor to disclose their assets, then you must have a process server or sheriff's constable go physically serve them with the summons to appear for a debtor's exam. If they fail to appear for it, then you have to serve them again, this time with an order to show cause why they should not be held in contempt. If they appear for that one and they have a good reason for why they missed the other one, then it is no big deal.

But these people are not being jailed for failure to pay a debt. They are being jailed for contempt of court for not showing up for a debtor's exam.

The only debt which can land you in jail for not paying it is child support.

I have never known anyone in my entire life who was put in jail for not paying a debt.

Please don't let the debt collectors scare you so much with this stuff.

Don't make a mountain out of a mole hill.

[GoingDown]

I needed to add to this:

Never ever agree to a payment plan of any kind in court in front of a judge.

Always say that you simply cannot afford to make any payments and stick with your story, if you do appear in court, and you lose the lawsuit. In a situation like this, try to say as little as possible, and do not agree to make any payments, and don't sign anything. When I used to work in the rental business, I saw so many people sign stipulated judgments, and so forth in court, and it is always a mistake. Never sign anything. The judge will enter a judgment, with or without your signature. You're not a lawyer, you probably don't have a lawyer with you, so you have no idea what you are signing and agreeing to, so don't do it.

I have sometimes heard people say that they would go to court when someone sued them and try to get the judge to okay some sort of payment plan to avoid wage garnishment. I cringe whenever I hear this.

[kornellred]

What is astounding about the original posting concerning the Illinois woman getting tossed into the pokey is the exceedingly trivial amount of money she owed. I have the feeling that this was done to provide an example to debtors that they cannot simply disregard their debts and assume that there are no consequences.

But it is unequivocally true that a debtor cannot, and will not, be hustled off to jail simply because they owe money that they are not paying. However - once a money judgment is in place, and the debtor is summoned to court for an asset examination, they are obliged to appear or face arrest. Heck - you can be arrested if you fail to pay a parking ticket, if a judge issues a warrant (which they do automatically in most cases).

[SweetGeorgia]

Yeah, I don't think they're doing this in most locations. I read a different article about this (a year or two ago?) which was set in one of the suburban Twin Cities counties.

As to whether you're actually being jailed for a debt...yes and no. Technically, it's not debtor's prison. And you probably won't sit in jail for long (but even a day or two can cost you your job, and what happens to your kids while you're gone?).

But if the amount you have to pay to get sprung is related to the amount of the debt, rather than a standard amount, then the difference is semantic.

I wonder what happens if the debtor files bankruptcy shortly thereafter. Would this be a preferential payment? And could the trustee recover it? I think you pay the court directly, rather than the creditor.

[GoingDown]

I see we're still not getting it here.

You won't be arrested and jailed for not paying a debt.

Only for contempt of court. For not showing up for a debtor's exam.

And let's keep in mind that debtor's exams are EXTREMELY RARE.

I've had a judgment against me for years, and they have never called me in for a debtor's exam. I have never paid a penny of it. I will never pay a penny of it. And guess what? I have never been arrested and I have never been put in jail. And I have no fear of it ever happening to me over this debt.

So, stop the fearmongering. Stop doing the debt collector's job for him.