Govt. Notices Rise Of "Debtor's Prisons," Doesn't Like Them

An increasing tool of choice for collection agencies is getting folks thrown in jail for missing “financial assessment hearings,” even when the folks had good reason – like moving and never getting the letter – or the validity of the debt is in dispute. In addition, collectors are requesting forfeited bail to pay off judgement, turning our local jails into de facto debtor’s prisons, and the police into deputized debt collection agents. Now regulators and officials are taking notice, and taking action to curb some of the worst abuses.

Are local courts overstepping by helping bill collectors apply the screws? [Crosscut] (Thanks to Lainie!)


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  1. Loias supports harsher punishments against corporations says:

    Bout time.

  2. tinyhands says:

    Huh? How is missing a “financial assessment hearing” between two private individuals a crime that can be enforced by the police? I would think that someone’s civil liberties have been violated and a case should be made for false imprisonment.

    • Loias supports harsher punishments against corporations says:

      The whole issue is skirting across the line of legality. It most definitely violates the spirit of the law if not the letter.

      The way they maneuver the system is to issue a hearing to determine your financial status, and when you don’t show up they issue a bench warrant for your arrest.

      • tinyhands says:

        But notice of a hearing would typically be delivered by either certified mail or a court-authorized process server, either of which would have a “delivery failure” result. Anyway, the point of the story is that the legal system is being abused by the debt collectors. One more reason to know your rights.

        • Loias supports harsher punishments against corporations says:

          Ah, but in this case the court hearing is being mailed to an old address. So the debter never receies the court ordered appearance.

          Not sure if it needs to be certified, and the collectors are often the “court-authorized process server” so they are disincentived to find the debter in this case.

        • bennilynn says:

          I was sued several years ago. I didn’t find out about until I got a letter about the default judgement in the mail. It turns out they had an old address of mine and, since I didn’t answer the door (because I didn’t live there), they just left it on the porch and considered it served. It was very frustrating because it was for a debt I didn’t actually owe and I had the paperwork declaring as such, but by then it was too late, really. I had to pay the debt and court costs, which altogether ended being triple what they claimed I originally owed.

          The funny thing is, they got my correct address to send the letter about the default judgement by asking the DMV.

          • nova3930 says:

            As I’ve said in the other 3 or 4 items Consumerist has posted about this issue, then underlying issue is that serving legal paperwork is not being done correctly, which is an issue for ALL civil proceedings, not just debt cases.

            The preferred solution seems to be gutting the courts ability to enforce their orders instead of reforming the process serving system, which is absolute insanity….

            • LainieP says:

              Good point, Nova3930! What would you suggest? (Not snarky here, I am very curious as to what reforms could be made.

              • nova3930 says:

                Most places have pretty sane requirements for process serving, either an officer of the court (bailiff, sheriff, etc) or a licensed process server has to serve the papers in person or the court does the service through “signature required for delivery” certified mail. Enforcing those or similar requirements is a great place to start.

                • FrankReality says:

                  Agree with you 100%. Requiring them to be officers of the court, e.g. law enforcement officers or deputized process servers to deliver them personally, verify the identification of the receiver is the person in the summons and then recording/returning the receiver’s signature (e.g. chain of custody and retaining proof of delivery) is what needs to be required.

                  Anything less is inadequate.

              • Karita says:

                I don’t know, but there need to be reforms. I’ve been served twice – once I was being evicted from a foreclosed home I rented. The marshal apparently threw the summons and complaint onto a second-story deck, and because I rarely went out there, I didn’t find it until 3 weeks later, covered under snow. The second time was recently – apparently the plaintiffs thought I was the agent for service. Someone uncovered my old home address, which is odd in itself. The return of service said it was in hand service, which it definitely wasn’t. My ex boyfriend called me to say there was a summons and complaint stuck in his door and he thought it might be for me. Definition of abode service.

                The only think I can think is that everyone who has been improperly served should complain. I send out a lot of stuff via marshals, and there is probably just one in each county here in CT that I trust to do it correctly. If everyone complained, maybe the powers that be would actually pay attention. Maybe.

            • Beeker26 says:

              It’s not that at all, read the article for more information. You can’t legislate away the rights of a judge to issue a warrant for contempt of court. But you can control how bail is handled and how notice is served.

              Reforming the process-serving industry is a great first step. First off you remove simple first-class mail from being valid proof of delivery. There are simply too many ways for this to fail. Notification via certified or registered mail should be the mandatory first step. If that fails then an INDEPENDENT process server (one that’s in no way affiliated with the plaintiff) is sent out and should be required to personally deliver the notice to the defendant — not just leave it with a third party or at the address on file.

              It’s sad that these things need to be legislatively spelled out, but when you’re dealing with scum sucking money grubbers who’d sell their own mothers’ souls for a quick buck I guess you just gotta.

            • MrEvil says:

              I know for small claims court in Texas the ONLY process server for a defendant in the state of Texas is the county sheriff or constable, there are no options for self service. I don’t know about district courts, but I sure don’t hear mention of private process servers running around in disguise (like Seth Rogen in Pineapple Express) serving orders to appear. However, that doesn’t mean the sheriff or constable doesn’t just stop and drop like UPS either.

          • LainieP says:

            I’m really sorry to hear about this. You may want to talk to a lawyer about getting the judgment vacated so that it no longer appears on your credit report.

          • AustinTXProgrammer says:

            That court is messed up! I have understood that you can petition to have default judgments set aside for cause, such as improper service!

          • tinyhands says:

            I’m not a lawyer, but I would have thought that you’d then have a case for recourse against the actual owner of the debt. You say it was several years ago, so your statue of limitations may have passed.

        • Beeker26 says:

          Right, but the problem is that most of the time they mail the letters by regular first class mail. And legally it’s considered “received” as long as it’s not returned by the post office as undeliverable. So if you’ve moved and the new owner or tenant decides to throw out your mail instead of marking it and dropping it back into the mailbox you’re screwed.

          And while you could protest that such a notice should have been sent by certified mail or process server, you have to show up in court and make that point, which of course you can’t do since you never received notice in the first place.

          • oldwiz65 says:

            Process servers are no better than ordinary mail; it’s usually called gutter serving and is apparently quite common at least in Mass. The servers don’t even bother and since no one is going to take your word for it, you are out of luck.

        • Bohemian says:

          In SD an attempt to notify you by certified is all that is needed. If the delivery fails, nobody signs for the letter then can proceed with the civil case. Laws in some states are really flakey.

    • DanRydell says:

      If you are ordered to be in court and you don’t show up, you’re going to spend some time in jail. No violation of civil liberties.

      • Beeker26 says:

        Unless of course the petitioner did their best to ensure you were never notified.

      • Loias supports harsher punishments against corporations says:

        Read the article, really. It is indeed a violation of civil liberties.

      • Difdi says:

        Situation: You’ve disputed a debt with a creditor, who has no problem sending mail to your current address. The creditor decides to sue you, and “mistakenly” serves the court summons at an address you haven’t lived at in 15 years, resulting in you never knowing you need to be in court at all. This results in a bench warrant. When you’re arrested, bail is set at the amount of the disputed debt, and whether you show up at your next court date or not, the bail amount is handed over to the creditor. The creditor then drops the lawsuit, and everybody goes home happy, except you.

        And you claim that doesn’t violate civil liberties?

      • greggen says:

        Actually DanRydell, when the person ordered to appear in court is not notified they were ordered to appear, but are arrested for the bench warrant, this is a violation of their civil liberties.

        Dont be such an ass..

  3. FreshPorcupineSalad says:

    I’m shocked at how easy it is to unwittingly miss a court appearance. I would have thought a summons would be sent via registered mail with a receipt, or handed to you in person by a court official. It is scary to think that an error in mail handling could cause someone their freedom, if only for a short time.

    • BettyCrocker says:

      It’s an error they make on purpose.

      • mythago says:

        Exactly. Reputable process servers do not pull this kind of crap. Sleazebags working for sleazebag debt collectors do.

        • shepd says:

          Depending on where you are, you don’t get a process server.

          Where I am, you send a letter by regular mail. After 45 days with no negative contact (ie: Letter isn’t returned to you marked “return to sender”, etc) you sign an affidavit saying that you sent that letter by regular mail and didn’t receive any indication that the letter wasn’t received properly. At that point the court considers the “victim” served and proceeds with court dates, etc.

          If you receive a bounceback, I assume at that point you’d need to use either a process server or you’d need to use registered mail (if the person is living there but sending things back).

          This is for small claims court, anyways. Perhaps for “real” court the procedure is different. Small claims here is good to something like $10k, though, so why would you use real court unless you’re handling the problem with a real lawyer. :)

          • kujospam says:

            The problem is most people are too stupid to know what to do when they get mail that isn’t theirs. Most people just throw it out. I just moved into a new house for me, and still sometimes receive their mail. I used to collect it for them, but they never came to pick it up like they said they would. So after 2 months, I just throw it all out.

            • Willow16 says:

              If you know their address, you can just write it on the envelope, cross out your address and drop in a mailbox. It will get to the new address. If you don’t know the address, you can cross out the address, write “not at this address” and drop it in a mailbox. It will then go back to the sender and they’ll have to figure it out.

    • Awesome McAwesomeness says:

      And those “errors” aren’t always errors at all. Unscrupulous bill collectors have been known to serve at addresses they know are old, and for disputed debt. If everything was done fairly and on the up and up, then I don’t see a problem with people being arrested for not showing up at legit hearings, but these scum balls who do this tend not to be too honest about it.

    • LordTwinkie says:

      I was sent a summons to appear in court for a charge at my old apartment, one which I absolutely would’ve fought cause it was bogus. The sheriffs office served the summons at the address of my old apartment, the one I had already moved out, but it was the address given to them by the apartment complex who knew I didn’t live there anymore.

      I missed the court date and summarily lost, I didn’t learn about this till I was trying to buy a house and looking into my credit report. They screwed me over hard the unscrupulous dirt bags. I wanted to fight this but time was an issue in getting my FICO score up and I was having trouble rounding up evidence that I had already moved out of the apartment at the time of the summons. So I paid the debt :( but I put up a nasty review on one of those apartment guide sites. sigh….

  4. Cicadymn says:

    Wait wait wait wait wait.

    So they’re taking the people they want money from, and putting them in a place where they can’t earn money to pay them?

    This is what insanity must feel like.

    • humphrmi says:

      That was the point of eliminating debtors prisons in the first place. And the court actions that result in modern-day debtors prisons wasn’t intended to revisit that part of our history. However the collection agents have, of course, twisted the courts to do their bidding, because they get a hard-on telling people to pay up or they’ll go to jail.

    • Beeker26 says:

      And they don’t care because it’s assumed you’re going to post bail to get out. And surprise! the amount of your bail just happens to be the exact same amount that you owe (another questionably-legal tactic as bail is not supposed to be used in such a way), which they petition the court to take. So the only way they don’t get your money is if you sit in jail, which just isn’t really a good option for most people.

      It’s utterly despicable behavior.

      • Awesome McAwesomeness says:

        Honestly, I think I might just sit in jail. The jails around here aren’t too rough. I would be willing to sit it out based on principal, then sue the shit out of the debt collecting agency.

    • DanRydell says:

      It”s often not an issue of being unable to pay. Many people choose not to pay debts they can afford to pay.

      • herbie says:

        This honestly sounds like you’re pulling it out of your ass. What on earth makes you think that people just walk away from debts they can afford all the time?

        • tbax929 says:


        • pawnblue says:

          Typically, it’s the wealthy that do this, but they aren’t the ones going to jail. I have a old college friend who is doing quite well, low to mid 6 figures. He went 50k underwater on his house. He could easily make the payments, but he had a different idea.

          He borrowed more money for a new bigger house, right down the street. He got the house for less than he paid for his original house. He also borrowed the money for 2 new cars. Then he hired a lawyer to tell the bank to eat the first loan, he wasn’t paying anymore.

          His bet is that housing values can’t depreciate anymore in his neighborhood. He knows the hit to his credit won’t last longer than his stay in his new house. So by the time he’s ready to move, his credit will be fine.

          He’s wealthy enough to beat the system. Most people aren’t. When people get frustrated with the wealthy, please understand that it is because different rules apply to them.

          • Loias supports harsher punishments against corporations says:

            This is a situation completely unrelated to the one we’re talking about. He did something already described in other posts about people underwater on their mortgage buyign a newe house and letting the first go into forclosure.

            Apples to oranges.

      • Awesome McAwesomeness says:

        Or debts they don’t even owe.

    • Excuse My Ambition Deficit Disorder says:

      insanity…yeah…with a little stupidity thrown in there…

  5. nacoran says:

    Uh oh.

  6. CBenji says:

    I have been on both sides of this issue and I don’t see how anyone could go to prison over this. The only time I would think this could happen is if it was child support. How is this an issue?

    • Beeker26 says:

      Collections agency decides to take you to court. They purposefully send notification of the lawsuit to an old address so you never receive it. When you don’t show up in court the judge issues a warrant for your arrest for ignoring the summons you never received. Cops pick you up and you’re tossed in a cell with your bail set to the exact amount the agency says you owe. If you don’t pay the bail you sit in jail till your arraignment. If you do pay the bail the agency petitions the court to collect it is as money owed and your debt is now paid in full.

      So not only do they have the pleasure of having you thrown in jail but they also get their money unless you’re willing to rot in a cell.

      • Blitzgal says:

        I once broke an apartment lease when the landlord refused to fix a leaky roof and my living room ceiling caved in. I sent them a certified letter written with the assistance of an attorney explaining why I was leaving and providing my new mailing address. They sent their security deposit notice to my old apartment address — after they cleaned the place out and obviously knew that I’d moved. However, I had filled out one of those cards with the post office and got it forwarded to me. For the next several years I kept a close watch on my state’s public records repository to make sure they weren’t trying to get a default judgment against me. In the end, they kept my security deposit but apparently wrote off the rest of the rent that they were out.

        But yeah, they definitely purposely send notices to old addresses. This is why you HAVE to get your mail forwarded each time you move!

    • CBenji says:

      I still think that it must only be in certain states or that certain District Magistrates would do it. I know I took a landlord to court once and she went by the book on what she would and would not allow. I made out quite well, and the landlord was doof, but I would think that some District Magistrates would be too busy to even bother with this sort of thing.

  7. smo0 says:


  8. Puddy Tat says:

    This is scary – just imagine being hit with a dept you simply don’t owe and then your thrown in JAIL…?

    • SilverBlade2k says:

      That’ll be quickly straightened out after the bank which did that has had a lawsuit filed against it. If this ever happened to me, I would file a lawsuit straight away in the ‘we have to sell everything, including the iron and wood used for construction’ category.

      • Awesome McAwesomeness says:

        No kidding. I wouldn’t post bail on that, but I would make sure my husband called news crews, I would make sure they knew I didn’t owe the debt, and I’m guessing after the judge is painted to be a monster and the debt collection agency is exposed, and their butts were sued for a very large sum, they’d learn their lesson.

  9. zifnab0 says:

    The government has noticed people being put in prison due to failing to pay debts?

    Who do they think have been doing all of the arresting? It’s not like we have private courts, private prisons, and private police forces.

    When will people wake up and see all the real abuses are being done BY THE GOVERNMENT!

    • Conformist138 says:

      Well, private for-profit prisons are big business in the US. But that’s an entirely different issue.

    • rustyjar says:

      The whole point of the article is that private business are gaming the system to make the judiciary act as their enforcement wing. Its not the “government” that’s abusing the system – its the collection agencies using questionable legal tactics to collect on questionable debt.

      • zifnab0 says:

        No matter how unscrupulous you are, no person can have another imprisoned without the assistance (or complacency) of the government.

        In almost all of these cases, the individuals are served by the sheriff (or local police), refuse to show up, and then the collector asks the judge to imprison them for contempt. The judge then issues a bench warrant and the individual is arrested by the police.

        I understand that Consumerist is very pro-totalitarian government, but to suggest that it’s private actors FORCING the government to arrest these people is the height of naivete.

  10. kalaratri says:

    The people who lived here before us get ‘served’ all the time. Apparently leaving it on someone’s door counts as it being delivered around here. We keep calling these companies and saying that they don’t live here, but surprise, surprise, they don’t care.

    I should say that the one that was actually delivered by an actual deputy was done correctly. He knocked on the door, waited for me to answer, took notice that I wasn’t the person being served and that she didn’t live here, and took the papers back with him.

    • SacraBos says:

      If you wanted to be really neighborly, you could notify the court directly that such person did not live at that address. Then when they try to screw the guy, hopefully the court will take a dim view about their practice of “serving” people when they know full well that aren’t being notified.

    • Corinthos says:

      I get someone elses also. I just come home and its stuck to my door. I looked up the person on facebook and messaged him. He told me just to throw them away and apologized. I just continue the throw them away when I get them. There is no where on the order they give me to call if it was served to the wrong address. They even stick it to my door when I’m home without knocking to even try to see if I am there.

    • oldwiz65 says:

      Certainly would be interesting if the police showed up and arrested you, insisting that you are someone else, refusing to accept your ID, and drag your ass off to jail for a strip search and a $5,000 bond to get out for a debt that’s not even in your name. I’m sure the news crews would have a fun day over this. Don’t think that just because the person doesn’t live here that YOU are safe from being arrested; the police could be in on the scam along with the judges.

  11. Gulliver says:

    “It does make you wonder about the whole debt collection process,” Corbit says. “In no other [civil] process do you get sent to jail for missing a hearing.”

    Judge Roy acknowledges that. “I’ve never ordered a warrant for not showing up for a deposition or witnesses not showing up. And people don’t show up for jury duty all the time. I’ve never seen a judge order a warrant on that.”

    That is proof positive the courts are acting as a collection agency and shows you do not know what you are talking about.

    • Beeker26 says:

      Yeah, this guys is a real douche and needs some kind of judicial reprimand, if not an outright disrobing.

    • oldwiz65 says:

      wonder if the corrupt judges get a cut under the table from the collection agencies?

      • MrEvil says:

        It depends, if the judge is elected it’s VERY likely that he’s taking bribes in the form of campaign contributions. If he’s not elected and appointed for life or a long term he may not be on the take.

    • madanthony says:

      well, in that case I’m never showing up to jury duty again!

  12. stvlong92 says:

    I hope they do something about credit reports next. How can companies get away with running a credit check on you before hiring you? It comes down: to I can pay my bills because I can’t get a job, and now I can’t get a job because I haven’t paid my bills. If the govt were to default on their debt (which may happen), no one would do anything to them, right? No bad mark on their credit record, no phone calls demanding money, no FICO score to worry about, etc.

    • JollyJumjuck says:

      Well, that’s because you’re a sole individual, and you are much easier to bully around than an entire government.

  13. RipCanO'Flarp. says:

    This is why it’s called unsecured debt… right? Right?!

  14. Mike says:

    Charles Dickens called, he said it is the worst of times.

  15. Bog says:

    This why everyone should resist any “unexpected” arrest with any any all force possible as if your life depended on it; if the cops don’t give you a legitimate reason then assert your right to self preservation and protection.

    • herbie says:

      This is absolutely a recipe for disaster, and a way to get yourself killed, if not thrown in jail for years and years.

    • DEVO says:

      Sound good but probably REALLY bad idea. Have you ever dealt with police? They have guns and tasers and sticks and everyone believes them before you. I’ve actually gotten away with some pretty sketchy shit just by cooperating and telling them what they want to hear.

  16. Blitzgal says:

    The woman in this article had a default judgment entered against her in 2006. She hasn’t run a credit report on herself in four years?

    I also don’t agree that moving is a “good reason” to let your responsibilities lapse. It’s an excuse used all the time for missing bills, etc. Mail forwarding is simple to set up.

    That said, a bench warrant for a default judgment is crazy and she never should have been thrown in jail for it.

    • myCatCracksMeUp says:

      Mail forwarding is only good for one year, and it doesn’t always work correctly even for that one year.

      Lots and lots of people never check their own credit report; while I know it’s a good idea to do it for a number of reasons, learning about a default judgement against yourself would never have crossed my mind.

      Most people erroneously believe, as I used to also, that if you were ‘served’ with papers to appear in court, that you’d actually be served in person by a represenative of the court. That is how it SHOULD be. Sending something like that in the mail is ridiculous.

  17. BuyerOfGoods3 says:

    This is exactly why people are moving to Texas. They don’t exist here.

  18. Excuse My Ambition Deficit Disorder says:

    If collection agency’s are using the judicial system and law enforcement as their pawns….can’t we too use the same system to our advantage. If they incorrectly bill me and never give the money back to me (in timely fashion of course)…wonder if I can get a bench warrant for the CEO of the company. Yeah, like that would happen…these collection agencies are the arm pit of capitalism. I never thought I would say this…but they really need to be regulated to the fullest extent of the law if not further. They are “legal” (use that term very loosely) crime syndicates.

  19. TuxthePenguin says:

    There is a very, very easy way to prevent the “abuses” in this – require all court notices to be delivered to a person with physical sign-off. No sign-off, no delivery.

    Eliminate that problem and you aren’t going to jail for not paying your debts, you’re going to jail for ignoring the courts.

    Then again, I’ve never seen anything but anecdotal evidence that court notices are never really delivered… what percentage of these notices really go “undelivered”?

    • IThinkThereforeIAm says:

      You are making the same mistake I’ve been guilty of:

      expecting logic to enter the government workers’ minds.

      I don’t see it happening…

    • bsh0544 says:

      What if you come to deliver the notice and I refuse to sign? Have I just made myself invincible, so to speak?

  20. Loias supports harsher punishments against corporations says:

    The CNN article brigns to light “why” adults don’t use them as often.

    Children have grown up with the message of “use a condom.” Those who are 40+ now, on the other hand, grew up in a world without widespread STDs and the dying remnants of “one partner, one life” so the idea of needing a condom doesn’t make much sense to them. Now these 40+ people are getting back into the dating world after decades of a safe marriage (sexually speaking).

  21. duncanblackthorne says:

    This is fracking insane. Isn’t stopping this nonsense one of the reasons that this country was founded in the first place?

  22. Scryer_360 says:

    Is that the guy who played Shane in “The Shield” in that photo?