Congress abolished debtors’ prison in 1833, but in reality, the prosecutors’ offices and the courts have empowered debt collectors to make use of this same criminal justice system to terrorize and punish debtors into paying the debts they owe. These debts range from consumer debt to car payments to student loans to utility bills to medical bills. This development is very disheartening if you consider that private collection agencies now control the debt of over 70 million Americans, including low-income families.
Is this just for huge debt?
Reports have shown that even those owing the smallest sum are still being threatened with jail time even when it is illegal. The Consumer Federation of America releases a payday loan report that showed that over 3000 people in Utah were served arrest warrants because of unpaid loans between 2017 and 2018. In this article, we will be discussing the criminalization of debt and how people can avoid being arrested for debt.
How the criminalization of debt occurs
Most of these private debt collectors get the backing of the criminal justice system to issue arrest warrants when the debtors fail to appear in court. However, it isn’t that simple. Most times, the debtors have no idea that they had a court notice or they have been sued. Tens of thousands of arrest warrants are issued annually, most of which are because of non –appearance in court. This is one way the collection agencies use the system to their advantage.
How low-Income families are bearing the brunt of this criminalization
This trend of issuing arrest warrants has affected low-income families and retired individuals the most. Black and Latino communities are also the most harshly affected because of the racial and ethnic gaps that already exist with wealth and poverty.
Arrest warrants are issued for very small amounts
Because of failure to show up to court, debtors who owe as low as $20 get issued arrest warrants. There have been many cases like this in the civil court, and law professionals have reviewed over 1000 cases where the debt owed was very low. It is important to note that the cases don’t just happen in one state; it took place in over 25 states. Researchers have found that the median total debt owed to these predatory lenders is $900.
Debts involving bounced checks
Private collection agencies have contracts with over 190 district attorneys’ offices to let them make use of their seal and signature on letters to demand repayments from their debtors who have issued bounced checks. Over one million consumers receive such repayment demand letters, which usually contain threats of jail time and prosecution. The district attorneys’ offices have now become a means to scare debtors into paying off their debts by threatening jail time.
To wrap it up
Situations like this exacerbate the suffering of people that are already struggling. More needs to be done to ensure that debtors are aware that they are being sued so they can show up in court and plead their case.
If you are being sued by a debt collector, you need help immediately. The attorneys at Dsouza and Strachan Legal Group have the knowledge and experience to help you fight off the collectors and regain control of your financial future. Contact Dsouza and Strachan Legal Group today for a free consultation.