CHICAGO, Illinois (PNN) - August 30, 2012 - To most of us, "debtors' prison" sounds like an archaic institution, something straight out of a Dickens novel. But the idea of jailing people who can't pay what others claim they owe is alive and well in the 21st-century Fascist Police States of Amerika.
According to a report in The Wall Street Journal, debt collectors in Missouri, Illinois, Alabama and other states are using a legal loophole to justify jailing poor citizens who cannot pay their debts.
Here's how clever payday lenders work the system in Missouri - where, it should be noted, jailing someone for unpaid debts is illegal under the state constitution.
First, the creditor gets a judgment in civil court that a debtor hasn't paid a sum that he owes. Then, the debtor is summoned to court for an examination; a review of his or her financial assets.
If the debtor fails to show up for the examination - as often happens in such cases - the creditor can ask for a "body attachment" - essentially, a warrant for the debtor's arrest. At that point, pig thug cops can haul the debtor in and jail him or her until there's a court hearing, or until the debtor pays the bond. No coincidence, the bond is usually set at the amount of the original debt.
The practice - in addition to putting an additional squeeze on poor people - turns courts and pig thug cops into enforcers for private creditors, from payday lenders to health care providers. The situation prompted Illinois legislators in July to pass a bill "to protect vulnerable consumers from being hauled to jail over unpaid debts," in the words of state Attorney General Lisa Madigan. The Debtors' Rights Act of 2012 requires two "pay or appear" court notices to be sent to debtors before an arrest can be made, and also prevents creditors from calling for multiple examinations unless the debtor's financial state has significantly changed.
Many of the victims, Madigan noted at the time, were living on funds that are legally protected from being used for outstanding debt judgments, such as Social Security, unemployment insurance or veterans' benefits. In one case she cited, an Illinois court brought a "pay or appear" order against a mentally disabled man living on legally protected disability benefits of $690 a month. The man told the court of his circumstances but was still ordered to pay $100 a month or appear in court once a month for a three-year period.
"It is outrageous to think in this day and age that creditors are manipulating the courts, even threatening jail time, to extract whatever they can from people who could least afford to pay," said Madigan. "This law corrects that gross oversight and puts a stop to throwing people in jail for being poor while still allowing fair debt collection when people have the means to pay their debts."
Illinois notwithstanding, the modern-day debtors' prison probably isn't going away anytime soon, given the current economic climate. More than a third of FPSA states allow borrowers who can't or won't pay their debts to be jailed.
