Debtors Prisons are Back…

...and as illegal as ever, but that's not stopping collection agencies from having people arrested.

Take, for example, what happened to Robin Sanders in Illinois.

She was driving home when an officer pulled her over for having a loud muffler. But instead of sending her off with a warning, the officer arrested Sanders, and she was taken right to jail.

"That's when I found out [that] I had a warrant for failure to appear in Macoupin County. And I didn't know what it was about."

Sanders owed $730 on a medical bill. She says she didn't even know a collection agency had filed a lawsuit against her.

"They say they send out these court notices, and nobody gets them," Sanders says.

That's right. $730. The problem with the recession and its aftermath is that the credit, collection and debt practices are almost exactly the same as they were before the recession -- only now, people are still in financial difficulty due to high unemployment, low salaries and depleted savings. The punishment, in other words, doesn't fit the crime.

This is tangential but something I've been thinking about: what if the government forced the big three credit ratings agencies to roll back credit scores to pre-recession levels? It would cost almost nothing and would go a long way towards allowing Americans to rebuild their lives.

  • nicole

    It gets worse. It’s unconstitutional by both U.S. & Michigan law, but that doesn’t seem to matter.

    Kyle Dewitt spent three days in jail because he was too poor to pay a fishing fine. Last spring, Dewitt was ticketed and fined $215 for fishing smallmouth bass out of season (Dewitt disputes the charge).

    But Dewitt, 19 years old with a fiancée and a nine-month-old son, lost his job at a grocery store in 2010 and has been out of work ever since. He couldn’t afford the $215 fine. Instead he offered to pay $100 up front, and repay the rest in a month. But Judge Raymond Voet of Ionia, Mich., refused. The judge sentenced Dewitt to three days in jail.

    The American Civil Liberties Union paid to break Dewitt out. Now the group is suing on behalf of Dewitt and four others in Michigan who were jailed because they were too poor to pay misdemeanor fines.

  • IrishGrrrl

    I”m confused….how can they issue an arrest warrant for a civil lien? This is news to me…..

    • mrbrink

      From what I know, a failure to appear for a court motion filed by a collector can be construed as contempt. I live in Illinois, and a friend of mine faced an eviction from her apartment a few years ago and owed $2200 in back rent. The landlord filed a motion to appear in court to collect the back rent and the official notice, I believe delivered by hand by a state trooper, stated that a failure to appear could result in a warrant issued for her arrest. She showed up, but there are a lot of ways collectors, working through the legal system, can have you arrested and processed for your hardships and inability to pay your debts in many instances.

      Failure to pay your parking tickets in a timely manner gets you a boot and fees and puts your vehicle through hell, but can very easily lead to jail time as well.

      It’s not called “debtor’s prison” anymore, but the barriers to prison due to your debt are not made of brick.

    • joseph2004

      I’ve never looked into to it but I’d be curious in general what collection agencies can and cannot do according to the law. I had a neighbor who went into foreclosure etc and was having a horrible time keeping up with all her bills. She lived in the condo across the hall from me, and I used to get calls from collection agencies (who of course were prohibited from disclosing to me their actual purpose) who would ask for my neighbor by name (as if they’d just happened to get the wrong number) and, when I told them they had the wrong number, would begin questioning if I knew her and if so could I get her to come to the phone!
      When I threatened to call the authorities, they were quick to hang up.
      Calling a neighbor in such a situation is, in my mind, a clear violation of the the target person’s privacy. And it involves a neighbor in something that’s none of their business either.

  • IrishGrrrl

    OT the right side column of the page is showing the literal html from google ads….you may want to look into that.

  • mrbrink

    My credit was shot after 9/11 forced my former company to layoff thousands of workers and I couldn’t keep up with my $500.00 per month car payment + insurance. My credit union cut my payments down to half for six months($243.00 per month), but I was out of Full-time work for a solid year after 9/11.

    I lost the car to a repo about a year before it was supposed to be paid off after paying off over $21, 000 over 4 years. I think they ended up selling it at auction for $8,000. They made back whatever I owed, but still charged me for the balance, which was just about $8,000. 8 grand in the hole. No car, fucked up credit. I played by the rules.

    I’ll take that deal, Ashby(oops, sorry, Bob). But my recession started after Bush took office.

  • trgahan

    Don’t know if it is true, but I suspect no one getting the court notices has a lot more to do with the collection agencies not wanting to pay process servers than anything else.

    Like debtors prison’s before, I am sure getting arrested and put behind bars really helps people trying to pay back their debts. It is such a logical and civilized way to about things.

  • Jimmy Abraham

    I do like where your heart is at by rolling back the credit scores, but…are the numbers not suppose to have some meaning and rolling them back kind of corrupts that meaning. If someone is a credit risk today, shouldn’t it be reflected? I know there are some debate on the accuracy, morality, etc. of credit ratings or even if the agencies really care about them…but if we assume they are important shouldn’t they be computed in the present with the current info? But I will add that maybe it should be discussed to have some peoples’ debts written down to help them financially thus giving their credit scores a boost.

    • IrishGrrrl

      To a certain extent, I agree. If they rolled back to my credit score in 2008 I’d be sitting pretty especially since I declared bankruptcy in 2010. But it wouldn’t be fair to everyone else who didn’t declare bankruptcy.

      The two things that would help the most would be allowing cram downs on mortgages in bankruptcy cases and for anyone in foreclosure because of financial hardship, debt forgiveness and/or a reduction on the principal owed on the mortgage more commensurate with the actual value of the house (which in my limited understanding is not much different than a short sell anyway).

      • Jimmy Abraham

        I think that is a good extension of what I was thinking of.

  • Bob Rutledge

    what if the government forced the big three credit ratings agencies to roll back credit scores to pre-recession levels?

    You’re a DFC (Dirty Fuckin’ Commie) for even thinking that, and should be thrown in Gitmo.

    • joseph2004

      Good sarcasm!
      I agree that the game has changed and lenders and billing departments must adjust to that reality.
      But the fact remains that even if you “roll back” the credit scores on someone who 5 years ago was solvent but who now is not, it won’t change anything. No bank will loan to them. They won’t magically become solvent and everybody wakes up to a new reality. Someone loaned someone money, and regardless of circumstance, that money, if not repaid at some point, becomes someone’s loss. Multiply that a million times and it becomes catastrophic.