Oh, I remember the first time somebody threatened to throw me in jail because I didn’t pay a debt. I was young and stupid, but not ignorant and fearful. I said, “Debtor’s prisons were outlawed!” (I didn’t know that from law school, I knew that from AP History.) The debt collector stammered and said, “Well, we can still get you in trouble.” Since I was already “in trouble” what with $150,000 in principal outstanding, I instructed the collector to contact me via mail and hung up.

Debt collectors are like bullies: punch them in the mouth, and well, they don’t “go away,” but they stop getting all up in your face.

Eventually, a summons came in the mail, and I responded, and yada yada, I’m still not in jail. The key is that “I responded.” I’ve made a lot of mistakes with my debts over the years, but I haven’t made a lot of mistakes with “courts.” See, courts matter. Debt collectors with hard-ons do not.

Keep that in mind as your read this story about a cancer survivor who got thrown in jail after failing to pay a medical debt that she didn’t even actually owe….

At first glance, this story from CBS Moneywatch is shocking:

How did breast cancer survivor Lisa Lindsay end up behind bars? She didn’t pay a medical bill — one the Herrin, Ill., teaching assistant was told she didn’t owe. “She got a $280 medical bill in error and was told she didn’t have to pay it,” The Associated Press reports. “But the bill was turned over to a collection agency, and eventually state troopers showed up at her home and took her to jail in handcuffs.”

Awful, right? Now read the fine print:

Under the law, debtors aren’t arrested for nonpayment, but rather for failing to respond to court hearings, pay legal fines, or otherwise showing “contempt of court” in connection with a creditor lawsuit. That loophole has lawmakers in the Illinois House of Representatives concerned enough to pass a bill in March that would make it illegal to send residents of the state to jail if they can’t pay a debt.

You see, people aren’t getting busted for failure to pay de minimis debt obligations; they’re getting busted for not showing up in court.

That’s how they get you. Like I said, debt collectors are bullies. And like any bully, they’re counting on you to be too fearful and embarrassed to stand up for yourself and ask for help.

The mistake that so many people in debt make is thinking that if they ignore it, it’ll just go away. I’ve been there. I’ve been afraid to answer my phone or open my mail. I’ve sat on the $X a month I could pay towards my debts because it seemed inconsequential to the $X + $1 zillion it felt like I owed.

But that’s when real trouble finds you. Remember, there is no debtor’s prison! You cannot go to jail because you can’t pay your debts. What you can do is talk to your creditors or the collection agency, and work out a deal. If they are so bastardy that they won’t work with you — and remember that most of these collectors are cheap knee-breakers who just want a little taste — then seeking out a court-ordered settlement might help you.

Don’t be afraid of these collectors. Be afraid of judges. Respond to the summons, make your court date, and make a deal. Not even Georgia puts people in jail for simple inability to pay their debts.

Jailed for $280: The Return of Debtors’ Prisons [CBS Moneywatch]


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