Will I Go to Jail for Not Paying My Debts?

No reasonable person wants to go to jail, especially for failing to pay debts, like medical expenses or child support, but the fact is it can happen, and it can be avoided too. The great Victorian writer Charles Dickens wrote extensively on the grim social iniquities of his time.

Meet the debtor’s prison

Thankfully the debtor’s prison doesn’t technically exist today, but one of the social institutions popular in England during Dickens’ time was the “debtor’s prison,” – a prison where a person could be jailed indefinitely until his debt was paid.

It did not matter that the person could not work to earn the money to pay the debt, and many people died in these jails as a result of the terrible conditions within them. Dickens’ own father, John, was imprisoned in a debtors’ prison, and Charles was forced to leave school at the age of 12 and go to work in a bootblack factory to help support his family.

Fortunately, debtors’ prisons are a thing of the past. The federal judicial system abolished debtors’ prisons in 1833, and most states did the same during the 1830s and 1840s. But saying that there’s no longer debtors’ prisons does not mean that people cannot be jailed for unpaid debts. In fact, it happens all the time.

So can a person be thrown into jail for not paying debts? Read on.

Child support debts

These days, in most states it’s common practice to jail a parent for failing to pay child support. There are two general ways to be jailed for nonsupport: criminal nonsupport and contempt of court.

Criminal non-support

In many states willful failure to pay child support is either a misdemeanor or a felony offense, and that distinction often depends on the amount of support payments the parent is behind. Not paying child support must be a willful act (i.e. the parent had the ability to pay and refused).

In cases like these, a police investigation is usually conducted to determine whether charges will be filed, and the non-paying parent is entitled to a criminal trial.

If the non-paying parent lives in a different state and is behind more than one year or $5000, federal charges for criminal nonsupport may be filed.

The parent may be sentenced to between six months and two years in federal prison (depending on the amount in question). Again, willful refusal to pay is the key determination in any particular case.

Contempt of court

When a court orders a parent to pay child support, the order becomes a legal obligation backed by the power of the court. A state court has the inherent power to enforce its own orders, including imprisonment until the individual complies with the order.

Contempt proceedings are typically very straight-forward: the court orders someone to do something, the person is able to do it, and the person refuses to do it. In the case of a child support debt, the court must find that the person had the ability to pay, and did not pay.

In many cases a state court will jail the person despite a showing that he or she lacks the ability to free him or herself by paying the obligation (called “having the keys to the jailhouse door”).

Experience has shown these courts that friends and family of the jailed person will often step forward and pay the debt but the problems escalate if the person owing child support has absolutely no support system, family or even friends of their own.

Judgment Debtor Examinations

Debtors’ prisons are not supposed to exist, but creditor attorneys have created a modern version of these prisons through a legal loophole. This is how it goes down:

1. a civil judgment is rendered against an individual
2. the plaintiff/creditor then asks the court to summon the defendant/debtor into court to answer questions regarding assets that may be available to pay the judgment. This is commonly known as a judgment debtor examination
3. When the debtor fails to appear at the hearing, the creditor asks the court to issue a capias warrant to seize the debtor for failing to appear as summoned
4. The debtor is then effectively arrested and held on bond

In most cases the bond is finally given to the court for release, and then passed onto the creditor.

What if the bond isn’t enough to pay off the creditor?

If the bond is not enough to pay the creditor, the court will hold the judgment debtor examination. This process turns the state court into a very effective debt collection agency.

The Washington Post reports that “more than a third of all U.S. states allow borrowers who can’t or won’t pay to be jailed.” In one case the Post reports that a 26 year old woman was arrested for failing to show up to a court hearing over a $1,159.87 credit card debt. When she posted a $500 bond, that money was turned over to the creditor.

The answer to staying out of jail just may be through bankruptcy

Filing bankruptcy will stop a debt collection process cold and even though a child support debt cannot be discharged, filing bankruptcy can stop the state court from forced collection (including wage garnishment, bank seizure, or imprisonment) while you’re paying the debt under the supervision and protection of the federal bankruptcy court (the pendulum swings both ways).

In a Chapter 13 repayment bankruptcy, the debtor is given three to five years to pay child support arrears which is generally much longer than a state court will allow.

Some other positive points to ponder

The bankruptcy automatic stay will also stop a judgment debtor examination. When a debtor files for bankruptcy, all debts owed prior to the date of the bankruptcy fall under the jurisdiction of the federal bankruptcy judge. All state court proceedings must automatically stop. This automatic stay is a very powerful protection and gives the debtor a chance to propose a plan to either discharge the debt or repay it over time. Most civil judgments are forever discharged at the end of a bankruptcy case.

The take home

If you can pay your debts, pay them, especially when it comes to child support. And remember that if you plan to go the bankruptcy route, the courts will weed out a person’s current or past ability to pay their debts in the end. But if you are indeed experiencing problems paying any of your debts to the point that it’s severely affecting your life, bankruptcy is a very viable option to creating a new start.