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Are You Accused of Debt?

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Are You Accused of Debt?

It is not common to be detained for debts, but only sued, but in some states, you could be detained for not observing an order of a judge.

By Sean Pyles Senior Writer | Personal financial and credit, and personal finance Sean Pyles leads podcasting at NerdWallet as the producer and host of NerdWallet’s “Smart Money” podcast. The show “Smart Money,” Sean talks with Nerds across NerdWallet’s NerdWallet Content team to answer listeners’ questions about personal finance. With a focus on thoughtful and practical advice on money, Sean provides real-world guidance that will help people improve their financial lives. In addition to answering listeners’ financial concerns on “Smart Money,” Sean also interviews guests who are not part of NerdWallet and produces special segments to explore topics such as the racial wealth gap and how to begin investing, and the background of college loans.

Before Sean took over podcasting at NerdWallet, he covered topics related to consumer debt. His writing has been featured throughout the media including USA Today, The New York Times and other publications. When Sean isn’t writing about personal finances, Sean can be found digging around his garden, going on walks, or taking his dog on long walks. He is based at Ocean Shores, Washington.

Aug 5, 2021

Editor: Kathy Hinson Lead Assigning Editor Personal financial, credit scoring, financial management and debt Kathy Hinson leads the core personal finance team at NerdWallet. In the past, she worked for 18 years at The Oregonian in Portland in roles including copy desk chief and team director of design and editing. Previous experience included news and copy editing for many Southern California newspapers, including the Los Angeles Times. She earned a bachelor’s degree in mass communications and journalism in The University of Iowa.

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You can’t be arrested just because you have a debt on what you might think of as consumer debt: charge on a credit card loan or medical bill. Legally, can’t even threaten the person with arrest. However, they have other legal options for you, like suing to demand payment.

In some rare cases, this kind of debt may lead to arrest on other charges like theft, fraud or defying court orders.

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The threat of arrest made by collectors are illegal

At one time, people were able to be imprisoned for owing money, but debtors’ prisons were illegal within the United States since the mid-1800s.

Additionally, the law 1977 law prohibits debt collectors from making threats or misleading consumers, which includes threatening arrest. Alongside the rules regarding what collectors can say, it limits how and when they can reach you.

But debt collectors may also utilize the legal system

Debt collectors cannot be arrested, but they can demand payment from you and this is usually the most effective legal remedy. Many thousands of civil lawsuits over debt are filed every year, sometimes with little documentation to ensure accuracy about how much is owed and who is liable.

Less than 10 percent of people who are in debt get an attorney representation when accused of a debt. Many more don’t respond to lawsuits in any way and, in the end, they’ll get the default judgment, which can lead to , a bank levy or either.

If you’re sued by default.

If you receive an order from the court, don’t ignore it. Often, simply attending court and asking the collector to prove that it has sued the right person for the right amount is enough to dismiss the case or get it settled for less.

Legal loopholes could lead to the arrest of a suspect

There are a couple of situations where aggressive creditors could use legal loopholes to obtain or threaten to arrest for related debts:

In about one third of the states that debtors could be detained if they fail to follow a court ruling that resulted from an action. Also, a debtor lost the court case or didn’t show up, or was required to pay, but failed to. The arrest was for a defiance of the court, not having to pay the debt.

Some payday lenders pursue or threaten to arrest if a consumer’s payment check bounces usually claiming fraud.

Rent-to-own furniture businesses sometimes enforce the consumer who fails to pay, but who refuse to return the furniture.

What can you do

If you’re being harassed by a threatening debt collector:

Be skeptical Make sure you know the facts, including whether you are the owner of the debt and the exact amount, by .

Stand your ground Do not be enticed by making a quick decision. Take the time to figure out the best method to .

Make sure you are protected: Contact debt collectors who are harassing you to the .

>> MORE:

Author bios: Sean Pyles is the host and executive producer for the NerdWallet’s Smart Money podcast. His writing has appeared on The New York Times, USA Today and elsewhere.

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