In Bankruptcy Information, Bankruptcy Questions

debtors-prison1Unscrupulous creditors will sometimes threaten to have a debtor put in jail. While it’s possible that non-payment of some debts (child support is one) could land you in jail, in most cases the creditor is making empty threats if they claim that the sheriff will come and take you to jail.

The Bankruptcy Code does have an exception to the automatic stay for the commencement or continuation of a criminal action; however, creditors cannot institute criminal actions. A criminal case has to be brought by the public prosecutor, such as the district attorney or state’s attorney. In a recent case the Sixth Circuit Court of Appeals held that a creditor who threatened criminal action against a debtor in Chapter 7 was guilty of violating the automatic stay and fined the creditor $7,500. You can read an excellent summary of the case here.

Creditors are not above using questionable tactics to collect debts. Before you believe everything they say, check with an attorney about your rights.

Recommended Posts

Leave a Comment

Free Consultation

Not readable? Change text.

Start typing and press Enter to search