Question: “Is there such thing as debtor’s prison? Can I go to jail for not paying my debts?”
Answer: Good question and believe it or not many people ask me this! The answer is that America outlawed debtor’s prisons back in the 1800s. Yet, there have been some reports of people being arrested because of their credit card debt. Note that these people are not arrested because they haven’t paid their debt but because of loopholes in the laws or failure to appear in court when issued a subpoena or the like. Usually, if you fail to pay back a debt, the debtor or the person who owes the money can be sued and then a civil judgment can be obtained by the creditor or the one that sued the debtor. The debtor in this case is summoned to a civil court. Depending on the Court and the jurisdiction (where you were sued) there may be rules that require the debtor to appear in Court. The failure to appear could force a warrant to be issued for your appearance. Again, this is not based on the fact that the debtor owes the money but the fact that the debtor did not comply with Court rules.
At that point, the police can haul the debtor in and jail them until there’s a court hearing, or until they pay the bond. No coincidence, the bond is usually set at the amount of the original debt. This is still rare but cases are popping up here and there. Still, it is illegal to throw you into jail for owing a debt! Don’t trust a creditor when they threaten to throw you in jail and just be careful about how you handle the legal proceedings once your debts have reached that stage. To be safe, consult an attorney in your county to find out the exact rules and procedures in the collection of debt once the legal process has begun.