Publicly financed police and court employees have become private debt collectors for predatory lenders in several states.
To most of us, "debtors' prison" sounds like an archaic institution, something straight out of a Dickens novel. But the idea of jailing people who can't pay what they owe is alive and well in 21st-century America.
Those who view debt with a smiley face as the royal road to wealth accumulation and tend to be forgiven if their default is large enough almost invariably come from the top rungs of the economic hierarchy. Then there are the rest of us,...
According to a report in The Wall Street Journal, debt collectors in Missouri, Illinois, Alabama and other states are using a legal loophole to justify jailing poor citizens who legitimately cannot pay their debts.
Here's how clever payday lenders work the system in Missouri -- where, it should be noted, jailing someone for unpaid debts is illegal under the state constitution.
First, explains St. Louis Post-Dispatch, the creditor gets a judgment in civil court that a debtor hasn't paid a sum that he owes. Then, the debtor is summoned to court for an "examination": a review of their financial assets.
If the debtor fails to show up for the examination -- as often happens in such cases -- the creditor can ask for a "body attachment" -- essentially, a warrant for the debtor's arrest. At that point, the police can haul the debtor in and jail them until there's a court hearing, or until they pay the bond. No coincidence, the bond is usually set at the amount of the original debt.
Many of the victims, Madigan noted at the time, were living on funds that are legally protected from being used for outstanding debt judgments, such as Social Security, unemployment insurance or veterans' benefits. In one case she cited, an Illinois court brought a "pay or appear" order against a mentally disabled man living on legally protected disability benefits of $690 a month. The man told the court of his circumstances but was still ordered to pay $100 a month or appear in court once a month for a three-year period.
"It is outrageous to think in this day and age that creditors are manipulating the courts, even threatening jail time, to extract whatever they could from people who could least afford to pay,"... [emphasis mine]
Minnesota Public Radio recently reported on proposed legislation in Minnesota that would place more restrictions on debt buying:
Apparently this debt isn't even owed by the person who is being prosecuted, who often doesn't even know that they're being prosecuted, or that the debt has become attached to their name. If the person accused doesn't show up in court (who often doesn't even know about the case against them), many judges will automatically rule in favor of the plaintiff, which is not legal.
Under the new proposed legislation, the debt buyer must:
That sounds to me like meeting the minimum burden of proof. I don't know what it's like in other states, or if similar legislation exists elsewhere, but that creditors wouldn't have to provide solid evidence for prosecuting otherwise innocent people is frightening and appalling.
I hope this passes. As you say, it meets minimum burden of proof which should have already been used in a system of justice.
Debt collection agencies abuse laws.
Debtor prisons are also on the rise thanks to the zeal of private companies that “file lawsuits against debtors and often fail to serve them with notice of court dates or intentionally serve them at incorrect addresses,” as the Brennan Center for Justice’s Inimai Chettiar noted. “When debtors do not show up, agencies procure arrest warrants from courts, leading to incarceration of the debtors. Bail is usually set at an amount equal to or higher than the original fees and fines they defendants couldn’t pay in the first place. All this has amounted to a return of debtors prisons.” [emphasis mine]