In a recent news article there was a story about a breast cancer survivor who was put in jail because she was unable to pay for her medical bills. According to reports, she got a $280 medical bill and she was unable to pay for it. So the bill was turned over to a collection agency and when she refused to pay, police took her to jail in handcuffs.
In 1830s, the US government abolished debtors prisons. However, today there are more than one-third of the states in US that allow people who have unpaid loans and bills to be put in jail. In some states, such as in Illinois, debt collectors have used public courts, sheriff’s deputies, and country jails to pressure people with unpaid loans and bills to pay their debt or they will be put into jail.
Under the federal law, no one can be put into jail for unpaid loans, such as cash advance loans. However, when debtors force the case into court, the defaulting person is at risk to be put into jail when he fails to respond to the court summons and pay legal fines. He will be charged with “contempt of court”.
According to Illinois Attorney General Lisa Madigan, “Creditors have been manipulating the court system to extract money from the unemployed, veterans, even seniors who rely solely on their benefits to get by each month. There are a lot of people who have been put into jail because they’re too poor to pay their debts and we should not allow these illegal abuses to continue.” Currently lawmakers are planning to pass a bill that would make it illegal to put people in jail for debts and unpaid loans.
In the 2010 report of the American Civil Liberties Union, they surveyed 5 states (Georgia, Louisiana, Michigan, Ohio, and Washington) and found an increasing number of people being put into jail because of unpaid loans and debts. According to the report, debtors prisons are flourishing even after the Supreme Court has prohibited the practice.
The good news is that not all lenders want to put debtors of cash advance loans into jail. They found that when a debtor is put into jail, they won’t be able to pay the debt. The most suitable option that lenders turn to is to work on repayment options with the borrower.
The sad truth remains. The non-payment of loans and other debts are effects of the recession that struck our country. According to Mardigan, “More people are unemployed and more people are struggling financially.”
The best help to prevent imprisonment of persons with unpaid loans, comes from their own initiatives. Unless people learn how to pay their cash advance loans and other debts responsibly, they will worry about being put into jail.