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Is There Such A Thing As Debtors’ Prison?

Being unable to pay all of your bills is scary. If this is your situation you are probably all too familiar with collection tactics such as calls at all hours of the day, letters demanding payment in full, and threats of collection lawsuits. Once you begin experiencing any of these things, it can be hard to concentrate and come up with a plan to get out of debt because your time is consumed with fending off lenders or collection agencies. And to make it worse, some lenders or collectors go a step too far and make threats they cannot back up legally.

One such threat is the threat that you will go to jail if you do not pay your debts. Generally speaking there is no such thing as “debtor’s prison”, but you do need to take any collection activity against you seriously. Here are some of the possible consequences if you fail to take heed of collector’s efforts to contact you for repayment:

• Repossession of your car.
• Foreclosure on your home.
• Collection lawsuits for credit cards, medical bills, and other unsecured debts.

If you are sued, you have to answer the lawsuit. Failure to answer will result in a judgment being entered against you, and then the creditor will try to collect what is due. Collection remedies can include garnishment and asset hearings. A garnishment is where the judgment creditor gets court approval to have your employer hold out part of your paycheck, and pay it to them directly. This means you bring home less money, and that can add to your money problems. An asset hearing is the creditor’s way of finding out what assets you have and this can include learning where you work or bank so a garnishment can be sent to your employer or financial institution. The thing about these hearings is that if you don’t go, the Judge may find you in contempt of Court and that is the one time a bench warrant for your arrest is a possibility. So while no true “debtor’s prison” exists, there are ways for a lender to resort to this remedy in certain circumstances. Before you let things get this far though, call us for help. Maybe bankruptcy is the answer for you, or perhaps we can negotiate more favorable payment terms with your lenders and stop a lawsuit in its tracks.

For more information about how to manage debt, contact us at We will help by coming up with solutions that work for you.

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