Can you go to jail for not paying your debts ?

Posted on January 29, 2014. Filed under: Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Consumer Alerts, Consumer Bankruptcy Attorney | Tags: , |

jail

In other words, can debt collectors use the courts to hold debtors in contempt with jail time ?

This technique has been used to success by a collection attorney here in South Central Kentucky. It is occurring in other states as well. I haven’t seen it lately, but have within the last two years or so.

It is basically an end run around the old maxim that you can not be put in jail for owing debt, other than child support and, sometimes, taxes. Here’s how it goes: the debt collector’s attorney obtains a judgment against the debtor, then schedules a deposition on the judgment for asset discovery purposes. Then, when the debtor does not show for the deposition, the debtor’s attorney asks the state court judge to have the debtor held in contempt of court for not appearing and be required to post a cash bond equal to the amount of the debt in order to not be incarcerated.

Any debtor that faces this situation should immediately seek the advice of an attorney skilled in representing folks who owe and have been sued. Unfortunately, the debtor often does not even know that the deposition has been scheduled.

I am hopeful that most state court judges would see this for what it is, and not incarcerate individuals for this type of contempt.

photo credit: Thomas Hawk via photopin cc

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