Unscrupulous creditors will sometimes threaten to have a debtor thrown in jail or send the police to their house unless they get a payment over the phone. These are scare tactics. No creditor can have a debtor thrown in jail, nor can a creditor send the police to collect a payment.
Collection of debts is a civil matter in the law, and people don’t get put in jail for civil matters. The idea of debtor’s prison, where people who couldn’t pay their debts were sent to prison, went out with Charles Dickens.
Debt collection starts with gentle reminders that a payment has been missed. As time goes on without a payment, these reminders become more strident. When a bill is about 90 days past due, creditors often start more aggressive collection efforts. This include frequent phone calls and written demands for payment. It’s about this time that the shady debt collectors might threaten jail.
If a debtor still doesn’t pay, the creditor can hire an attorney to sue the debtor. This usually ends up with a judgment against the debtor for the amount owed plus attorneys’ fees and court costs, which can add thousands of dollars to the original debt. It isn’t a defense that a person is unable to pay the debt. If the money is owed, the creditor is entitled to judgment regardless of the debtor’s ability to pay.
Post Judgment Collection
Once a judgment is entered against a debtor, the creditor has more options available to him for collection. The creditor can garnish the debtor’s wages. Garnishment is a court order that the debtor’s employer must withhold up to 25% of the debtor’s pay and send it to the creditor. The creditor can also attach or levy on bank accounts, cars, and other property. This again is a court order directing the sheriff or constable to seize the debtor’s property. But even then, a creditor can’t have the debtor put in jail.
Bench Warrants and Arrest
It is possible that a judge can order a debtor arrested and even have the debtor put in jail. This is not because the debtor owes the creditor money or that the creditor has a judgment against the debtor. It’s because the debtor failed to obey an order of the court.
Once a creditor gets a judgment, there are various methods, as we’ve talked about, to collect. Many times, a creditor doesn’t know what assets a debtor has available to be taken, so the creditor gets an order from the court directing the debtor to appear for a debtor’s examination. In Utah this is called an order in supplemental proceedings, or supp order.
By the time a debtor gets served with a supp order, she has gotten used to ignoring attempts to collect the debt, including things served on her by the sheriff or constable. Up to this point, these attempts weren’t from the court; they were from the creditor. But, a supp order is a court order directing the debtor to do something. Ignoring a court order is considered contempt of court, and judges can put people in jail for contempt.
So, the debtor ignores the supp order and doesn’t appear for her debtor’s examination. The creditor reports this to the court, which then can issue a bench warrant, which is a warrant for the sheriff to arrest the debtor and hold her in jail until she can be brought before the court to explain why she ignored the supp order. Notice that the debtor isn’t arrested for owing the money to the creditor; she’s arrested for failing to appear after being ordered by the court to appear.
The bottom line is, a creditor cannot have a debtor put in jail for a debt. A debtor might end up in jail for ignoring a court order, but that’s not because she owed the debt.
If you have debt issues and want to discuss bankruptcy, contact us here, or text or call (801) 413-3708, or email email@example.com.