Wednesday, July 28, 2010

We still have debtors' prison--sort of

Martha White writes that the Minneapolis Star-Tribune did a story on people who say their debts got them sent to jail.

And not income tax evasion, either.

The problem is aggressive bottomfeeder collectors.

The collector files against the debtor, requiring him or her to appear in court.

If the debtor does not appear, the collector gets a default judgment, allowing a second hearing at which the judge will go through the person’s assets and bank accounts to see if there is anything to get there.

If the debtor does not show up then, either, a warrant for arrest may be issued.

This means govt funds are used to collect a private debt. The person can be picked up and thrown in jail.

The debt may not even be owed anymore at this point or be all penalties and attorneys’ fees. The collector owns it.

But—this can be good for the debtor. The collector may not have the paperwork. All the debtor has to do is show up and ask for the papers.

If you get a letter threatening legal action, respond, don’t hide.


Chris said...

This is sad but very true, and with the economy remains the same everyone will be facing this issue.

Star Lawrence said...

Yes, the economy totally blows the wad--outside of DC, anyhow. Those people have NO CLUE--as I read in another context the other day, someone needs to hit them with a clue bat! The pres waltzes off to Michigan and places like that between golf games and preens around on stage saying oh, look at the green jobs. Come on! We have no industrial base anymore. A lot of us went to college, too, guy! Do you think Larry Summers has to put off paying his Visa? Or that Christina woman who badly needs a stylist? Aw...this is making me mad again.