The Return of Debtors’ Prison? Not Exactly.

As the recession drags on and bankruptcy rates continue to soar, debt collectors are turning to more and more aggressive tactics to get consumers to pay up. In a growing number of cases, borrowers who can't make their payments are even finding themselves in jail.

Headlines suggesting a resurrection of debtors' prisons have stirred fear and controversy over the trend: "Florida Man Threatened With Jail Over One-Cent Debt," stated one FOX News headline; "Debtors' prison - again," read the St. Petersburg Times.

While the number of people being arrested in connection to unpaid debts has been on the rise recently, particularly in Florida, these headlines are slightly misleading. Strictly speaking, debtors' prisons have been banned in the United States since 1833.

Debt is Not a Crime - But Contempt of Court Can Be

The U.S. Constitution does not allow people to be imprisoned solely for being unable to repay their debts. But, technically speaking - at least according to those in favor of the approach - Florida debtors and others around the country are not being jailed for their debts at all; instead, they are being jailed for violating court orders.

Sometimes the violated court order merely required the debtor to show up for a court date, but other times the order in question is for repayment of a debt - with bail conveniently set at the amount due.

The subtlety of this distinction has led many detractors to call constitutional foul over the practice. Alan White, a professor of law at Valparaiso University, told the Minneapolis Star Tribune, "If, in effect, people are being incarcerated until they pay bail, and bail is being used to pay their debts, then they're being incarcerated to pay their debts."

On the other hand, some argue that if not for the threat of imprisonment, debtors who can afford to pay back their loans could simply choose not to do so without consequence.

How to Prevent Debt-Related Arrests

To reduce the chances of having a debt-related warrant for your arrest issued for your arrest, open all your mail and carefully read any documents from collectors, even if you don't recognize them right away. Creditors often sell old debts to other firms, which pay for the right to collect on them. This means that you might owe money to a company you have never heard of, rather than the one you originally borrowed from. Since interest and fees tend to accrue on top of what is already owed, the amount due might look unfamiliar as well.

In addition to bills from your creditors, another important thing to look out for in the mail is a court document called a summons (also known as a subpoena). A summons is the court's way of notifying you that a creditor is suing you, and that you must appear in court on a certain day at a certain time to discuss the matter. Although a summons does require you to go to court, it does not mean that you are being charged with a crime.

Ignoring a summons is never a good idea; the problem will not go away on its own. In fact, ignoring a summons will almost certainly make your situation worse. If you don't show up for your hearing, you could be held in contempt of court and a warrant could be issued for your arrest - not because of the debt itself, but because of your failure to comply with a court order. Furthermore, if you aren't there to state your case in court, the creditor could win a judgment against you by default, which will only create more legal and financial problems.

On the other hand, reading bills and court documents carefully, and showing up in court on your hearing date, will give you a chance to explain your situation to the judge. This gives you an opportunity to object to any portion of the bill that you think is inaccurate or explain any circumstances that may make it difficult for you to pay the amount due. Judges are usually willing to work out a payment plan to fit your budget.

Debtors Have Rights, Too

Federal law, through the Fair Debt Collection Practices Act, limits the methods that debt collectors can legally use to obtain payment from consumers. For example, a creditor cannot ask you to pay more than you owe or threaten you with imprisonment or violence for failing to pay. In addition, debt collectors are prohibited from harassing borrowers by calling repeatedly, calling during the late night or early morning hours, or calling you at work after being informed that your employer does not approve of the calls.

If you or someone close to you has received a summons or is struggling with debt and harassment from creditors, an attorney experienced in bankruptcy law can help you understand your rights and the legal options that may be available to help protect them.