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The following questions were submitted to John Roska. He is an attorney and writer whose weekly newspaper column, "The Law Q&A," ran inthe Champaign News Gazette. Please note that this article has been edited by ILAO staff.
A friend went to jail on a warrant in a collection case.How is that possible?I thought there was no such thing as debtor’s prison.
Answer
Although there’s no debtor’s prison, it’s possible to go to jail in a collection case.But, not because you owe money or can’t pay it.Jail can only happen if you’re able to pay and refuse to. Or, it can happen if you miss a court-ordered court date.
First, understand that neither of these 2 outcomes can happen until after a judgment has been entered against you.A judgment can only be entered against you if you’ve gotten served with a summons and a copy of the lawsuit. It is also required that:
- You didn’t show up in court (default judgment),
- You showed up and consented to a judgment, or
- You contested the case, had a trial, and lost.
So, before a judgment, you can’t go to jail.This is because nothing before the judgment is a “must-appear” date. Until there’s a judgment, you can’t be ordered to make payments.
The summons you get before any judgment can happen is really just an invitation to appear.It says you “may appear” but not that you “must appear.”If you ignore a summons in a collection case, you just lose by default.The other side wins and gets a judgment for whatever they wanted, but you can’t go to jail.
However, after a judgment, all court dates are “must appear.”If you ignore a notice saying you must appear, you could be in contempt of court.To figure out if you are and to make sure that you get to court, a warrant is issued for your arrest.
Technically, the arrest warrant is really just a “body attachment.” But the effect on a debtor is the same.When found, the person is:
- Taken into custody,
- Processed, and
- Held until they either:
- Post bond, or
- Go to court for the hearing they missed.
Body attachments are the main reason people think jail is possible in a collection case.It’s not because the debtor owes money but because they missed a court-ordered court date.But this distinction, like the one between body attachments and arrest warrants, is not completely understood by the public.
The most common post-judgment court dates that debtors miss are Citation hearings or Rule to Show Cause hearings.Both are “must appear” court dates.In Champaign County, the local rule says, “Failure to appear at [these] hearing[s] may result in the issuance of a warrant of arrest."
A Citation to Discover Assets can be served on a debtor to try to enforce a judgment or post-judgment.It orders them to come to court and answer questions about their financial situation.As the name suggests, it’s for creditors to discover assets that can be paid on the judgment.
A Rule to Show Cause happens if a debtor hasn’t paid as ordered or fails to appear on a Citation to Discover Assets.A judgment is not a payment order, so a Rule only happens if someone was specifically ordered to pay and did not. The Rule orders them to come to court to explain why they haven’t paid. Or, they may need to explain why they haven't shown all of their financial information to the judgment creditor.
Besides a body attachment for failing to appear when ordered to, the only other way debtors go to jail is if they were ordered to pay, can pay, and will not pay.This is called willful contempt of court, which is determined at a Rule hearing.Then, the debtor will go to jail until they pay as ordered.
Last full review by a subject matter expert
November 07, 2017
FAQs
Can you go to jail for debt? The short answer is no, you cannot go to jail for owing a debt. However, you may have to serve jail time if you are guilty of contempt of court in connection with a debt lawsuit case. Contempt of court is disobeying a court order.
What happens if you never answer a debt collector? ›
If you receive a notice from a debt collector, it's important to respond as soon as possible—even if you do not owe the debt—because otherwise the collector may continue trying to collect the debt, report negative information to credit reporting companies, and even sue you.
Can you go to jail for not paying debt in the US? ›
A debt collector can't threaten to or have you arrested for an unpaid debt. If you're sued and you don't comply with a court order, though, you could be arrested.
What happens if you ignore debt letters? ›
Some of these letters have strict deadlines and your creditor can take further action if you do not reply. Ignoring them is not a good idea. Make sure your creditors have your current address. You might not know about court action if you do not get important letters.
What happens when a collector does not answer a debt validation letter? ›
Under the Fair Debt Collection Practices Act (FDCPA), a debt collector must respond to a request for a debt validation letter. If they don't, they're in violation of the act. You can report them to your state's attorney general, the FTC or the Consumer Financial Protection Bureau (CFPB).
Why you should never pay a debt collector? ›
A collection account can significantly damage your credit score, but the impact lessens over time. Paying off a collection might not immediately improve your credit score, but some newer credit scoring models give less weight to paid collections.
What's the worst a debt collector can do? ›
Even if you owe money, debt collectors aren't allowed to threaten, harass, or publicly shame you. You have the right to order a debt collector to stop contacting you, and they must comply. If there's a mistake, and you really don't owe the debt, you can take steps to remedy the error.
What happens if you go to jail with debt? ›
Debt is not wiped away or frozen in time when you go to jail. Bill collectors can continue to pursue collections while you're in jail, so it's best to set up a plan and prepare financially for jail. Your debt will continue to accumulate if you fail to close accounts that are set up with recurring billing.
How can I legally avoid paying debt? ›
If you want to know how to stop paying credit cards legally, that could be tackled with debt settlement programs or filing for bankruptcy. Some of these options can help you get much-needed temporary financial relief. Still, there are drawbacks to consider, including the risk of being sued or selling assets.
How long can you be chased for debt USA? ›
Some debts, though, such as federal student loans don't have a statute of limitations. Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt.
If the debt is not collected, then the debt collector does not make money. In many cases, although you would think that debt collectors would eventually give up, they are known to be relentless. Debt collectors will push you until they get paid, and use sneaky tactics as well.
What happens after 7 years of not paying debt? ›
The debt will likely fall off of your credit report after seven years. In some states, the statute of limitations could last longer, so make a note of the start date as soon as you can.
Do debt collectors ever forgive debt? ›
But the harsh truth lies somewhere short of "totally erased" and "no consequences." To be clear, debt forgiveness does exist, and it's possible to settle your debt for less than what you owe. But to get it totally erased is rare, and it usually requires an extreme measure, such as bankruptcy.
What is sufficient proof of debt? ›
But what must the creditor provide by way of documentation? At a minimum, it must produce: A copy of the original written agreement between the parties, such as the loan note or credit card agreement, preferably signed by you.
How do you outsmart a debt collector? ›
6 Ways to Deal With Debt Collectors
- Check Your Credit Report. ...
- Make Sure the Debt Is Valid. ...
- Know the Statute of Limitations. ...
- Consider Negotiating. ...
- Try to Make the Payments You Owe. ...
- Send a Cease and Desist Letter.
Don't provide personal or sensitive financial information
Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.
Is it OK to ignore debt collectors? ›
Here are some of the biggest consequences of ignoring debt collectors: - Your credit score will fall, which makes it harder to get new credit and sometimes even employment or housing - Debt collectors may get more aggressive in trying to contact you or your friends or family (though they're limited in what they can say ...
How long can I ignore a debt collector? ›
Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt.
Will debt go away if I ignore it? ›
Ignoring Debt Is Not a Solution
Unfortunately, debt is not one of them. Ignoring your debt will cause your situation to get worse and the longer you hide from it the less likely it is to go away.
Can a debt collector come after me if I never got a bill? ›
It's Not Your Fault
The credit report reflects your payment history, and “If you never received a bill, you haven't defaulted or paid late.” A creditor isn't generally required to send you a bill right away, though, he explains. They can delay billing, as long as doing so doesn't violate any law or your agreement.
