A recent article in a Minnesota newspaper has struck fear in the hearts hundreds of thousands of citizens with a common problem in this economy - being in debt and unable to pay. The article gave an account of a woman who was jailed after apparently failing to pay a debt for which judgment was being sought by the creditor. From one perspective, that account may appear to be true. The woman had been ordered to appear in court to answer as to why she had not paid. She failed to appear for the hearing and the judge issued a warrant for her arrest. She was picked up on a routine traffic stop, and when the officer performed a check of her identity the warrant was noted. She was jailed, booked, and fingerprinted. In a similar case, a man was threatened with jail for failing to make payments to a creditor when ordered to do so by a judge. The amount in question was a paltry $25 per month on an 8-year old debt.
You may be thinking to yourself that debtor's prisons are a thing of the past and were outlawed years ago. That basic fact is true. However, as more and more consumers fail to pay their due, creditors are looking for more and more ways to push the envelope to extract payment from delinquent customers. One way has been to use aggressive collection agencies and law firms that specialize in the collection of consumer debt. These firms are using the laws that have been on the books for many years but have been largely unused for debt collection. No one actually goes to jail for being in debt with perhaps the except of child support or alimony or separate maintenance payments. Those obligations have their own laws in dealing with their collection. Each state is different, but nearly every state has laws and statutes on t...
... middle of paper ...
...ring for a hearing or deposition without legal representation, they should educate themselves on the local rules for the court, and hone their knowledge of the collection and credit laws of their state. They should be prepared to answer, dispute and prove, or admit and explain each allegation of the complaint or discovery request. Contrary to popular belief, creditors are not required to accept what you can afford and be forced to leave you alone. Further contrary to popular belief, judges cannot force a creditor to accept less than what their agreement calls for. Be prepared to pay or have a reasonable plan at the ready.
The economy has changed the way creditors approach recovery and collections. Consumers need to be aware, educated and prepared or they could very easily find themselves in the position of the Minnesota woman - behind bars and baffled.
...was making a point only to find on the next page he made an argument counter to the previous point. Also, I found it odd that the end of his historical study occurred in the 1940’s. Consumer credit in America has changed since then albeit not as drastically as in the 1910’s and 1920’s. Nonetheless, I feel he did an incredible job scraping up evidence for debt that existed in an era when such things were very private. Early in this book he stated that he “adopted a national approach …to cast [his] nets widely so as to bring as much documentation as possible.” (p.15) The seemingly unimportant antique flyers and diary entries really did give a personal touch to this obscure corner of American history. Prior to reading this book, I was one of the believers in the “myth of lost economic virtue” (p.23) but now I have a new, more accurate, view of this topic.
One claim said that citizens pay around “$30,000 per inmate each year” (Jacoby 197). This grasps the reader’s attention by connecting their life to the problem; it is their money, a lot of their money, being used to imprison these criminals. The rates have increased on inmates since the 1980s by over 250% (Jacoby 1997). Jacoby declares that the prison system is terrible; he uses accurate and persuading evidence. According to Jacoby, flogging is faster, cheaper, and a more effective alternative to prison.
For debt, it begins with a simple late or missed payment. These missed payments allow companies to punish card owners without discretion. With this, lenders hike up interest and payments on their customers for negligence, regardless of what their reason may be. Whether it was a tough month for the family or someone died and expenses had to be payed, lenders do not care one bit. From 2013 alone, student debt was at 1.21 trillion dollars, and mortgage standing at a whopping 7.9 trillion (Miller, R. K., & Washington, K. (2014). These loans also feed into why we as a country are in debt, which currently stands at seventeen trillion. These missed payments also greatly affect interest rates from lender companies. Companies wait for payments to come late, which allows them to impose fees and hidden charges that must be paid along with the delinquent payment. With increased rates comes...
Prisons have been around for decades. Keeping housed, those of our society who have been convicted
Patton, Joshua M. "ACLU Calls Colorado Policy of Jailing the Poor for Failure to Pay Fines "Debtors'
One cold morning Sam Black woke up with aching chest pain. Troubled by this new condition he went to see his Heart Doctor. Little did Sam know that hours later he would be lying on the operating table in route for a triple bypass surgery. The surgery went as planned, but it was not the last of them. Sam was sent to many specialists and rehabilitation centers, building a large bill, which they had no money to pay them with. He still pays several grand a year for the medication he is prescribed. Years after the operation Sam and his wife, Elsie, have narrowly escaped foreclose, however the most problematic debt they have is the hundreds of small term loans with interest rates in the triple digits. Elsie once said in an interview regarding the loans they had to take out, “You can’t really keep up with them” (Wright, 2011). Almost a decade later Sam has trouble speaking and has to carry around an oxygen tank. This is a normal couple that got caught in the continuous cycle of payday loans. Like other millions of Americans The Black family settled for shady overpriced short-term loans.
Credit card debt is one of this nation’s leading internal problems. When credit was first introduced, and up until around the late 1970’s, the standards for getting a credit card were very high. The bar got lowered and lowered to where, eventually, an 18 year-old college student with almost no income and nothing to base a credit score on previously could obtain a credit card (much like myself). The national credit card debt for families residing in the United States alone is in the trillions (Maxed Out). The average American family has around $9,000 in debt, and pays around $1,3000 a year on interest payments (Maxed Out). Many people have the concern today that these interest rates and fees are skyrocketing; and many do not understand why. Most of these people have to try to avoid harassing collecting agents from different agencies, which takes an emotional and psychological toll on them. While a lot of the newly recognized “risky” people (those with a doubted ability to make sufficient payments) are actually older people who have been customers of certain companies for decades, the credit card companies are actually consciously targeting a different, much more vulnerable group of people: college students. James Scurlock produced a documentary called Maxed Out on this growing problem, in which Senator Jack Reed of (Democrat) of Rhode Island emphasizes the targeting of college students in the Consumer Credit Hearings of 2005
much money is available and how much can be spent makes it very hard to get into debt. When paying with a check the process
Nietzsche’s view can be expressed specifically in the penal system of today. The creditor/debtor relationship exists to a large extent in criminal behavior and its co...
Credit card debt, can be easy to get into, but yet can take years to get out of. Credit card usage has become an increasing occurence in the 21st century for any person above the age of seventeen. Carrying cash has become uncommon for the average man or woman and unlike cash where someone is limited to only what they have in their wallet, credit cards can have upwards to thousands of dollars on them. Granted, there are great things about owning a credit card. For example, in case of an emergency and there is not enough cash to cover the expense, a credit card can be a great back up plan. However, with all the positives there are negatives, the biggest one being, a person can wind up in debt. Thus, credit debt is an individual’s fault, derived
In the prompt “Debtor’s Prisons(2)” the author Samuel Johnson very well addressed a problem that existed in the 1700’s. Putting people in prison is one thing but imprisonment until one perishes is a whole nother unnecessary level of punishment. Being in debt is a crime but not a crime in which the repression should ever be death. I believe putting someone in prison only guarantees the debt will never be repaid.
Chapter 13 bankruptcy us mostly used to make up any type of debt payments and pay things off and in some cases it can be used to stop a foreclosure on a house. Chapter 13 bankruptcy cases usually last up to 5 years. During that time one would have to live under a strict budget that would require discipline. Most debtors that file for chapter 13 bankruptcy never pay back all their creditors all that they owe. That can ruin your credit because it stays on file for at least 10 years. Money management seminars are available to those that have paid 75% or more of their debt. Chapter 13 bankruptcy allows creditors to get at least some of their money back. Debtors keep all of their property and would out a compulsory, court-enforced plan to repay a portion of their debts over a certain period of time. With Chapter 13 bankruptcy some debts may be discharged but alimony and child support continue to be an obligation that must be fulfilled.
A person who is unable or unwilling to pay his or her debts may declare bankruptcy. The state of being solvent means that one has the ability to pay his or her debts. However, insolvency means that a person cannot pay his or her debts. In order to declare bankruptcy, a person must file a petition for bankruptcy in a bankruptcy court. A voluntary bankruptcy proceeding is started by the person who is declaring bankruptcy, whereas an involuntary bankruptcy proceeding is started by the creditors of the bankrupt person. A creditor who is not a party to the bankruptcy proceedings, but who has an interest in the proceedings, may file an ex parte application with the bankruptcy court.
"Identity Theft and Your Financial Life." Daily Record [Baltimore] 23 Aug. 2004, Special to the Daily Record ed.: n. pag. eLibrary. Web. 6 July 2011.
... valuable time, energy, peace of mind, and what should have been a normal life, trying to restore my credit and my life.”(Written testimonial of Michelle Brown).