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Can Creditors Send You to Jail?

Technically, the United States of America isn’t supposed to have debtor’s prisons. However, in some areas of the country, low income people are fighting to stay out of jail because they owe debts they can’t pay. 

Creditors are getting around the law by suing debtors, winning judgments against them, scheduling debtor’s exams and then having them arrested for contempt of court when they don’t show up for their court dates. 

Desperate debtors then pay what they can or stay in jail. The money they pay goes to their debts, and the cycle starts all over again.

The worst and most draconian of the creditors who are doing this aren’t even the entities you’d expect. You’d expect this behavior from shady “zombie” debt collectors who seem to care about little more than the money they can make. Instead, medical providers are the number one type of creditor pulling this nasty trick. Payday lenders are prone to it as well. 

Many of these debtors are caught by surprise. It’s not uncommon for debtors to ignore lawsuits when they receive a summons and complaint. Often, they figure they can’t do anything about the problem anyway. 

This is bad practice, as it can cause you to get a judgement you didn’t need to get, and put you in the habit of ignoring the mail that could lead to a debtor’s exam.

A debtor’s exam isn’t the same thing as a lawsuit, but it may look the same. It’s a hearing meant to help creditors determine whether they can actually collect the money they’re trying to get from you. It’s an attempt to identify assets. 

Some debtors are “judgement proof.” This means they have no assets that any creditor can legally collect from. In this case it’s actually helpful to go to the exam, as it will tell the creditor that they might as well leave you alone.

Ideally, you’ll never end up with a judgement against you.

If you file bankruptcy before a creditor takes you to court you’ll be protected by the automatic stay. The debt gets discharged and you can stop worrying about it.

It does require a little money on the front-end to file for bankruptcy, but it’s often worth it. Here at Haysom Attorneys, we help our borrowers manage the costs by offering transparent, flat fees and payment plans with a reasonable deposit.

Don’t let immoral, unethical debtors use the legal system against you.  Don’t put yourself in a situation where you have to fear jail just because you can’t pay a debt. Contact us for a free consultation today, and get the peace of mind that comes with getting a financial fresh start.

See also:

What is Zombie Debt?

How to Respond to an Orange County, NY Debt Lawsuit

5 Signs New York Bankruptcy Could Solve Your Financial Woes 

 

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