NPR Reports that Debtors' Prisons Are Alive and Well

Although debtors' prisons are illegal across the country, you can apparently still end up in jail for an unpaid bill. I first came across this reality reading one of Lea Shepherd’s (Loyola Chicago) law review articles, Creditors Contempt. NPR  tells the story of Illinois debtor Robin Sanders in Illinois, who was stopped by police for a loud muffler but taken directly to jail on an arrest warrant for failure to appear at a hearing on an unpaid medical bill, all in a lawsuit she was unaware of. Similar stories have been reported in Indiana, Tennessee and Washington, and all involve selling debt to a collection agency, that then files a lawsuit against the debtor requiring a court appearance. A notice to appear in court is supposed to be given to the debtor. If they fail to show up, a warrant is issued for their arrest. According to the story, despite that debtor’s prisons were outlawed early in our country’s history, one-third of all states still allow people who have not paid bills to be jailed.

How can this be? Illinois Attorney General Lisa Madigan is investigating this practice because it is clearly illegal to put people in jail for not paying a debt. Sometimes the incarceration process costs more than the debt owed, a charge sometimes billed back to the debtor. The Federal Trade Commission received more than 140,000 complaints related to debt collection in 2010. That's nearly 25,000 more than the previous year.

Comments

[R Kryger]

I'm surprised you failed to mention the capitol of debtor prisons (Minnesota).

[Doug Evans]

The debtors in question are jailed for ignoring court orders to appear which, in our state, are personally served on them by the sheriff, and are not arrested for not paying debt. I guess it's more sensational to allege imprisonment for debt. Your article, and many in the news, ignore this fact. I guess it's all right to ignore court orders, so why don't we apply this to our criminal justice system also, commit a crime and stop the courts from enforcing jurisdiction over the criminal.

[dana shetterly]

This is the problem with this that is not being addressed. The complaints being submitted nominally by debt collectors are fatally defective. They are based on information and belief, are not under the penalties of perjury or are robosigned under the business records exception. In short, there is no competent witnesses to state there is a debt in the first place.

To sum it up people are being imprisoned for defaulting on a complaint that is fatally defective in that it doesn't not state a colorable claim, which is no claim at all.

They are ineffective to give the court jurisdiction to even issue a default warrant.
If people in mass started collaterally attacking these robo judges maybe they would start doing their job.

I don't know when it started but for a long time courts have been letting fatally defective complaints be filed instead of telling these plaintiffs to get their act together.

Judge's are just lucky that people think that judge's have unlimited immunity. Not when they act without jurisdiction.

It seems facts and the witnesses that establish those facts don't matter anymore.

Soon the paper work will be titled
Warrant for Arrest in Lieu of Facts.

[rjs]

assume you meant:

"Although debtors' prisons are illegal across the country, you can apparently still end up in jail for an unpaid bill."

which is the way i'll cite it....

[Fred]

Mr. Evans:

I'm a criminal lawyer. In my jurisdiction when a defendant is arrested or fails to appear to answer a summons, a bond is set in the vast majority of the cases in an amount based on the defendant's perceived risk to the community and flight risk.

The bond amounts have a lot of zeros: $1000.00 or $2500.00 or $5000.00 or $10,000.00. Never are the amounts of these bonds in the amount of, say, $9,364.29 or $13,112.43 or $4,793.10.

These bonds can be posted by the defendant's signature (personal recognizance) or by the use of a surety (professional bondsman) or by posting cash. Only in traffic cases by out-of-state drivers have I known a judge to only allow a bond to be posted by cash (and only in states that are not members of one of the various interstate compacts).

But most importantly the bond will only be forfeited if the defendant fails to appear. And the forfeited bond goes to the state, not a private creditor.

[Ken Doran]

There is a conflating of issues problem here. Mr. Evans is correct in the distinction he draws. Also, defects in the process as applied by which failure to abide by a court order for discovery assets related to a debt (not the same thing as failure to pay a debt) is not of itself an argument that the sanction should not exist. Professor Martin, would you suggest that incarceration as a contempt-of-court sanction in post-judgment asset discovery matters should be barred, even in an extreme case, because that is indistinguishable from imprisonment for debt?

[SJS]

Thank you Mr. Doran and Mr. Evans. In my state a warrant is possible in ANY CIVIL MATTER when a defendant is personally served with and fails to appear under an order to show cause. Under most circumstances, the order to show cause is only entered by the court after a defendant or witness has already failed to respond to a personally served subpoena, or order for disclosure. It doesn't matter if the civil case involves a complicated business contract, sexual harassment, or a retail collection, the process and results are the same under state rules.

Are we really disagreeing that there should be consequences, including possible imprisonment, for failing to comply with multiple court orders? Isn't the real concern, as far as debtors are concerned, the perception or reality of faulty service, or insufficient proof that a plaintiff is entitled to relief?

[mark]

SJS - the assumption is that the defendant was personnaly served. If you read the article they state that the defendant has no knowlage of the court hearing indicating that they had not been served. Non service is an increasingly common way of trapping people by the debt vultures. Service is expensive, sending a letter to a "known" address is not service.

[Alan White]

I wrote about imprisonment of Indiana debtors some time ago here: http://pubcit.typepad.com/clpblog/2010/12/indiana-closes-debtors-prison.html. Those courts threatened criminal contempt sanctions even for debtors who appeared, based solely on their failure to pay.

[BK Attorney]

Why are these courts simply not issuing a DEFAULT JUDGMENT if the debtor fails to appear?

Why is the defendant required to appear in person? If they choose not to appear (or were not properly served) and contest the debt, just issue a default judgment.

This obviously does not apply to criminal or other civil actions, only debt collection.

[Fred]

As a follow-up to my comment above at 9:22 P.M., I am not conflating the issues. The issue is the same whether a person is in jail for failing to appear in response to a witness subpoena, civil or criminal, or in response to a summons in a criminal case.

How does that person bond out? What is the amount of the bond? How is the bond posted, personal recognizance, surety, or cash?

In my jurisdiction, 90% plus of the FTAs arise on the criminal side of the court. How the judges customarily deal with these cases on the criminal side sets the base line for how these cases are dealt with on the civil side. Moreover these cases should be dealt with in exactly the same way, as a FTA, even ones arising out of a civil case, is a criminal charge.

For a witness FTA this usually involves a dressing down in open court, the payment of court costs for the FTA, and a suspended sentence conditioned upon the witness timely attending all subsequent court dates. The witness almost never is sentenced to an active jail sentence unless he has developed a history with the court for failing to appear.

Some judges here will initially set a cash only bond in a FTA arising out of a debtor interrogatory in the amount of the judgment and sometimes will even include interest and attorney fees in the bond amount. Once counsel gets in the case, this is always modified to a traditional criminal bond.

It's this practice that gives rise to the claim of debtor's prisons. And it is a fair description.

[dana shetterly]

I guess no one wants to deal with the elephant in the room. The complaints that these debt collectors submit are fatally defective. THERE ARE NO COGNIZABLE FACTS SUBMITTED WITH THE COMPLAINT

You have to submit facts that would actually support a judgment. Statements from attorneys orally or in briefs are not facts before the court. The bottom line is you need a witness of some sort with first hand direct knowledge of the debt at issue. An unverified/uncertified/unauthenticated/unsworn robosigned statement of account is not a cognizable fact. They are arresting people for contempt on a process that is coram non judice and void.

Put simply these are criminal acts by the courts and associated personal.

[pete]

moreover i recently discovered in NJ that after you are picked up by the cops and put in jail like the article described you then have the option to serve out your debt for $50/day credit in the state of NJ. i was in court for a traffic violation and witnessed the judge give the option to every eligible candidate in jail and every one of them opted to serve out their debt. not a bad way to guarantee revenue for the private prison system!

[Patches]

Just saw a case last week that exactly fits the blog description. It was a credit card debt though and he failed to comply with a subpoena to supply documents and appear. Why the heck wouldn't a default judgment be sufficient? The debtor was a Spanish speaking citizen and could not read proficiently enough to make heads or tails of the legal jargon on the subpoena. He had to be bonded out! Poor guy. It was quite the incentive to file a 13 though.

It's like the court is collecting on a debt pressuring the debtors to pay under the "upholding the dignity of the court" jazz.. Shouldn't happen in the US! That is an old English tactic albeit the debtors usually were put to death.. :(

[SJS]

Patches,

In my state a default judgement is not always enough. it's post judgment discovery that often results in warrant. For example, I represent a secured auto lender and a default judgement for the possession of a car doesnt do much good if we don't know where the car is. That's why we ask the court for an order to compel the defendant to disclose the location of the car at a future court date. If the debtor fails to appear at the disclosure hearing, after being personally served with the order, he is in contempt of court and a bench warrant will issue. In the case of a money judgment the creditor has the same right to compel the defendant to disclose information concering his assets. The bench warrant is avoided if you simply give the creditor the requested info, or if you show up to court.

[Ben]

In Illinois, (land of corruption) a letter sent to "last known address" is legally sufficient notice to support a FTA warrant.

Also, in Illinois, the Court can garnish both wages and non-wages. Therefore, the vast majority of situations where collection parasites have "exhausted all options" involve debtors that are destitute and unemployed.

Leave it to "lawyers" to invent some pretext justification for that which is effectively debtor prison. (a rose by anyother name). Plain and simple,, the lawyers, judges and collection agents involved in this story are non-value added "members" of society. We as a whole would be far better off without them.

[mario pantoja]

The Illinois Department of Financial and Professional Regulation would like to invite you to participate in a public hearing regarding so-called “debtors’ prisons.” In particular, the Department would like to hear from those who have been impacted by the practice of incarcerating debtors who fail to appear in court or who violate a court order. The hearing will take place in the City Council Chambers at Marion City Hall on January 11th at 1 p.m. Please pass this invitation on to persons who might be willing to offer testimony.

January 11, 2012 at 1 p.m.
Marion City Hall
1102 Tower Square Plaza
Marion, IL

Please contact Jeremy Kruidenier in our Chicago office at 312-814-1696 or Shannon Miller in our Springfield office at 217-558-2953 with any questions.