You can’t be arrested or put in jail for not repaying a consumer debt. But you can be sued. If you’re sued and you don’t comply with the court requirements like showing up for a debt examination, you can be arrested. In this way, some debt collectors have found a loophole. But you can avoid being arrested by complying with any court orders.
Written by Todd Carney, J.D. Harvard Law 2021.
Updated November 17, 2021
Being in debt is stressful. Whether your debt comes from credit cards, student loans, or something else, it never feels good to have mounting repayments that you can’t make. The only thing that can make this situation worse is when a collection agency threatens to send you to jail.
While you can’t go to jail simply for not repaying a consumer debt, some debt collectors have found other ways to have debtors arrested. The good news is that if you are aware of your rights and abide by your obligations, you can avoid jail time over the inability to pay off debt. This article will go over what you need to know about jail and debt.
You Can't Go to Jail for Failing To Pay Civil Debt
During the 1800s, U.S. federal law made it illegal to imprison someone for failing to pay their debts. In response, the states got rid of their debtors’ prisons. To be clear, you can’t face prison time for failing to pay civil debt —also called consumer debt — which refers to many types of debt, such as credit card debt, medical bills, student loans, payday loans, auto loans, mortgages, rent, utility bills, and overdrafts on accounts, among others.
The federal Fair Debt Collection Practices Act (FDCPA) makes it illegal for debt collection agencies to threaten you with jail time or an arrest if you haven’t paid your civil debt. If a debt collector uses this kind of threat against you, you may have the right to sue the debt collector. It’s important to note that the FDCPA only regulates debt collection agencies, so calls and other contact from original creditors like a credit card company or a real estate mortgage company aren’t covered by the FDCPA.
Creditors Use Alternative Strategies To Get Debtors Arrested
Though you can’t be arrested and jailed for having and not paying your debt, in some states creditors who get judgments against debtors are using other practices to put debtors in jail for failing to pay their debts. The main methods are:
Contempt of Court
Although those who collect debt aren’t allowed to use the threat of arrest or jail over unpaid debt, they are allowed to sue you. If a lender sues you and you don’t show up for court, the judge will likely issue a default judgment against you. If this happens or if you do show up but the creditor wins a judgment, the court can require you to abide by post-judgment orders. This means you may have to show up to future court appearances or for a debtor’s examination.
If you don’t comply with these orders, whether intentionally or unintentionally, then the court can issue a warrant. The warrant allows you to be arrested and put in jail. As far as the law goes, in these instances, you aren’t going to jail for the debt itself but for being in contempt of court.
The American Civil Liberties Union (ACLU) reports that the following 44 states, plus the District of Columbia, allow judges to order an arrest and jail for contempt of court: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and Wisconsin.
Alabama, New Mexico, North Dakota, South Dakota, West Virginia, and Wyoming are the six states that don’t allow you to go to jail for contempt.
Creditors may also use a debtor’s examination to get you arrested. Once the court has made a judgment against you, they can require you to show up for a debtor’s examination so the creditor can get more information. In the exam, you must answer questions under oath about your financial situation. If you fail to show up for the exam, refuse to answer the questions, or purposely give false answers, you can be arrested.
If you can’t show up for an examination, you should reach out to the creditor’s attorney ahead of time and request to reschedule. If the other side won’t reschedule, you should file a motion with the court. You should also answer the questions truthfully when you do take the exam. You don’t have the right to remain silent in the examination.
Sometimes creditors will ask for multiple examinations over the same debt to see if your finances have changed and you’re better able to pay the debt. They may also request multiple examinations in hopes that you won’t go to one of them, which can lead to your arrest. After being arrested, you’ll be released if you post bond. The bond might be equal to the debt you owe.
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You Can Be Jailed for Some Debts
Though you can’t be arrested for consumer debts, you can be arrested for failing to pay child support or for committing a federal tax-related crime. Being arrested for failing to pay child support usually occurs only as a last resort and if other methods like wage garnishment have failed. In this instance, jail time will usually be under six months, so the debtor has an opportunity to make future payments. You can’t go to jail if you don’t have the ability to pay what you owe so long as you’ve filed proof with the court that you can’t pay.
Also, you can face jail time over unpaid federal taxes if you’ve violated a tax-related law, such as purposefully failing to file a tax return, committing tax evasion, or filing a fraudulent return.
Finally, you can face jail time over court fines and fees in some cases. The U.S. Supreme Court has ruled it’s unconstitutional to put someone in jail if they can’t afford to pay court fines or fees. But if you have the money to pay these fees and fines but choose not to, you can go to jail. Indigent or jobless people can still go to jail over unpaid fines, depending on the court’s review of an individual’s finances.
Protect Yourself From Aggressive Creditors
Although federal law forbids some debt collectors, like collection agencies, from threatening you with jail, these collectors don’t always follow the law. So if you receive unlawful harassment, you should file a complaint with the Consumer Financial Protection Bureau (CFPB).
You can also protect yourself by responding to any court notices or summons you receive. For a lawsuit summons, you will be able to provide a defense in court. In some of these instances, the law might be fully on your side, such as if the debt is time-barred under the statute of limitations. You should also never ignore an order to appear in court, including for a court hearing or a debtor’s exam. If you do, it may lead to jail time.
Finally, make sure you know your rights. You can look for a nonprofit legal aid organization or reach out to a local attorney for legal advice. Your state attorney general’s consumer division will likely have resources as well.
Settle the Debt
Another way to protect yourself from aggressive collectors is through debt relief. This could be filing for bankruptcy, consolidating your debt, setting up a debt management plan, or negotiating a settlement with the debt collector. Upsolve has helpful resources on filing for bankruptcy. Once you file, the court will issue an automatic stay, which will stop all collections activities.
If bankruptcy is not the right solution for you, look into debt consolidation or a debt management plan. A free consultation with a nonprofit credit counselor is a great place to start to better understand which option is best for you. Seeking some way to resolve your debt won’t just help you avoid prison, it will improve your credit score, stabilize your bank account, and get you more favorable interest rates long term. The bottom line is settling your debt offers many benefits.
Although you generally can’t be put in jail just for having debt, creditors have found loopholes related to debt that can land you in prison. Debt collectors can sue you for the debt and get a judgment against you from the court. If you fail to adhere to post-judgment court procedures, you can be placed in jail for contempt. Also, if you don’t comply with a debt examination, you can go to jail. Finally, issues stemming from breaking federal law, not paying child support, and not paying court fees when you’re financially able can all also land you in jail.
Despite these loopholes, debt collectors are forbidden by federal law from threatening you with prison time to get you to pay a debt. To protect yourself, know what debt collection techniques are considered harassment under federal law and always pay attention to court notices. Doing all of this will keep you out of jail.