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Can I go to Jail for Not Paying a Debt?

Posted on Apr 16, 2012 in Consumer Law, Debt Settlement, Illinois, Legal, Wisconsin

Debtors' Prison


Yes…well, sort of.  But you should never go to jail for a debt.

When you don’t pay a debt for too long, it goes into “default”. In almost all contracts, once a default happens, the creditor has certain rights to collect on the debt. One of these options is going to court and getting a judgment for the amount of the debt plus attorney’s fees and costs.

That part is simple.  You aren’t going to debtor’s prison for failing to pay your credit card bill.  The United States eliminated those a long long time ago.  Unless you intentionally took out a large sum of money and knew you couldn’t pay it, or lied to get it, you aren’t going to be charged with a crime like fraud simply because you tried your best and couldn’t pay.

But after getting a judgment, a creditor has the right to try a wage garnishment or take some unprotected property to pay the judgment down.  Which assets?  How much?  Well, that depends on where you work, where you live, and what you own.  These are questions the creditor has the right to insist you answer in writing.  This form is usually called a Financial Disclosure Form or Citation to Discover Assets.

If you ignore the writing, or if your writing is confusing, or you don’t back it up with paystubs, bank statements, tax documents, and so forth, you might get a letter in the mail informing you of a “supplemental examination” in front of a “court commissioner”.  When the creditor uses the power of the court to insist you appear, you must show up – it’s a big deal.  And if you can’t make it for any reason, call the creditor’s lawyer and the court commissioner.  The court doesn’t care much about the debt but it cares a lot about you not showing up, even if you don’t have money to pay the debt.

This problem is easy to avoid. When you are called to court Just Show Up! You can explain to the creditor why you can’t pay the debt. Maybe you have only social security or unemployment income.  It may seem like a waste of your time to go to a commissioner’s office for 10 to 15 minutes, but it’s not.  By failng to show up, the court can hold you “in contempt” and fine or even jail you for insulting the court and ignoring their rules.

If you have any questions about the possibility of going to jail for a debt, or any other questions related to your financial life give the professionals at Lakelaw a call. We take pride in our work and strive to always treat clients with Care, Kindness, Courtesy, Respect, Professionalism and Dedication.

This post was co-authored by Lakelaw Associate Nicholas D. Strom


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