The Criminalization of Private Debt

  • Man with Laptop

Criminalizing Private Debts

There are criminal proceedings on defaulters on the debts that they owe to creditors. Let’s take a scenario where the debtor has fallen sick and has missed out on the payments that he/ she regularly makes. The notices about missed payments have just been ignored since the debtor is away on treatment. The piled up debt now invites court hearings – the intimations of these too have not been attended to and this eventually turns out to issuing of warrants for the arrest of the debtor for the failed payments.

This is not a surreal scenario and can happen to any of the debtors who fail on his private debts. It is not the question about a debtor’s prison that needs to put you into a tight spot but the private debt collectors who cause enough agony. Whether they are just a few dollars or even larger sum of debts, they use the justice system to prey on the debtors and force them towards paying the debts. A report titled, “A Pound of Flesh: The Criminalization of Private Debt”, claims that one out of three Americans are facing the pressure from collections agencies as their private debts are turned to them. The report has been collated by the American Civil Liberties Union (ACLU). As per the reports, the number of Americans who are arrested and face imprisonment is 77 million people and the majority of them are the black and Latino community folks who battle poverty and wealth issues.

What leads to the arrest in private debt?

The debts are criminalized when there is a default in payments and even after issuing of notices to appear in court, the debtor fails to appear. Subsequently, the warrant of arrest is issued by the judge. There have been scenarios that the debtors are not notified of appearances or of the lawsuit.

The creditors can seek the assistance of collection firms (there are approximately 6,000 of them in the U.S.) for this process of debts collections from the debtors. These debt collectors file lawsuits asking for the repayment. Close to 95% of these cases turn out favorable for the collector as the debtors don’t defend their case, as reported by the ACLU. The debtors report their unavailability due to work, or illness, or childcare, or disability, or lack of transportation, or that they weren’t aware of the lawsuit. The count of issued arrest warrants for unpaid student loans & utility bills is several thousand. Since these warrants are tracked as arrest warrants by the court, the exact number is quite unknown. It might be shocking to know that there have been arrests for amounts as low as $28, and more than half of the U.S. states (including California) witness the scenarios with arrest warrants for private debts.

Agonized with threatening letters & creditor lawsuits

The ACLU has reviewed the situation around private debts and concludes that more than 1 million consumers get threatened by their credit via letters demanding the payments. The district attorneys in the U.S. have also allowed the debt collectors from private agencies to utilize their seal and signature on these letters. The repayment demand letters have only confused and agonized these debtors. Several of them are people who have suffered a loss of a job, or a divorce or even the death of a family member. While some battle illness and have medical bills that have piled up causing them debts. Hence they survive on the Social Security and unemployment related insurance. There are retirees with disabilities or on veteran’s benefit.

ACLU’s recommendations on Debt practices

The ACLU has concerns over the process of debt collection and calls it abusive considering that it affects human rights and equal protection. The regulations that govern the debt collectors have to be improved a lot.

ACLU’s report suggests the below recommendations:

  • Judges shouldn’t be issuing the arrest warrants in cases of contempt or failure to appear in court related to debt collections
  • State Legislatures to enact laws that prevent arrest warrants in debt collection lawsuits
  • Forbid the contracting between district attorneys and private debt collection firms
  • State attorneys to oversee the work of a district attorney & their contracts – mainly their involvement in debt collection practices. In lieu of this, they should sue unfair means of debt collection and protect the consumers.

Recovery Law Group, operating in Los Angeles, California and in Dallas, Texas are in concurrence with the above recommendations and work with consumers who suffer at the hands of collection agencies.

Assistance to pay off debts

Debtors do not immediately step up for assistance to pay off their debts. It is several years that they try to tackle the burden and then land themselves in situations of facing threats, arrests and pressurizing phone calls. For some, Chapter 7 or liquidation bankruptcy could be an option and for the other debtors, Chapter 13’s repayment plan can come to their aid. In order that they get ample support, the debtors can dial 888-297-6203 for the expert team of attorneys at Recovery Law Group. Their clientele in Los Angeles and Dallas are numerous and they have proven records of assisting debtors who are amidst financial challenges involving their private debts.


    *Are you more than 60 days past due on your mortgage?

    *Do you own a home?

    Are you currently working?

    By clicking "Submit", whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from ("Partners"), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

    2019-06-27T09:52:07+00:00