Oftentimes people considering filing for bankruptcy have a number of issues that lead them to that decision. Many people have debts that have been unpaid for some time and debtors wonder what kinds of recourse creditors may have. Of course, many creditors employ techniques including phone calls, letters, and threats. In some cases the creditors may sue debtors and even try to have debtors imprisoned for failure to pay debts.
“Debtors’ prisons”, jails and holding cells specifically for those who could not pay debts, have been abolished since the mid-nineteenth century; however, it is still possible to be imprisoned for failure to pay debts. The process varies by state, but to be in general, the party to be imprisoned would have to be served notice of the proceedings before being arrested or taken into custody. Service can create some interesting issues. For example, in Missouri, service can be delivered upon any member of a residence over the age of 15. This could result in someone having been served under the law but not even being aware of the issue. In Illinois service is often mailed. In cases where a debtor has moved or the address is incorrect he/she may not be aware of the issue.
These issues have recently come to the forefront in Illinois, particularly Southern Illinois. In Illinois a “boy attachment” order can be issued for failing to pay off a debt. Effectively, this is an order to arrest the individual for outstanding debts. Under these body attachments, generally effective for three years, a debtor can be imprisoned for failure to make a payment or failure to appear at a monthly hearing to state why he/she cannot make a payment. While it seems that law enforcement does not regularly seek out those with body attachments for failure to pay debts, they certainly could. Further, what often happens is that the individual is stopped for a minor traffic violation and then hauled into custody, often with bail expenses and even fees for impounding the vehicle the individual was driving at the time.
Many debtors and debtors’ advocates are calling for something to be done about the seemingly archaic practice of imprisoning those who cannot pay debts. In many cases, as the Illinois Attorney General Lisa Madigan states, people are thrown into jail for not paying debts when the only income they is protected income that cannot be forcibly used to pay debts, including social security income and disability income. These practices seem to abuse some of the most susceptible people in society, including the impoverished, the disabled, and the elderly. Even considering a more practical approach, imprisoning someone for inability to pay debt doesn’t seem to promote the ability to pay the debt. For an individual that is able and working he/she will have lost wages from any time missed and may fall even further behind on payments.
The Illinois Debtors’ Rights Act, House Bill 5434 of the 2012 Legislative Session, would end a number of these abusive practices and stringently regulate the use and issuance of body attachments. The Governor is expected to sign this legislation. While it seems that Illinois is taking great steps towards protecting debtors there are a number of states where debtors remain vulnerable to the very real threat of being imprisoned for failure to pay debts.