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February 22, 2018

"A Pound of Flesh: The Criminalization of Private Debt"

The title of this post is the title of this notable new big ACLU report. Here part of its executive summary:

An estimated 77 million Americans — one in three adults — have a debt that has been turned over to a private collection agency. Thousands of these debtors are arrested and jailed each year because they owe money. Millions more are threatened with jail. The debts owed can be as small as a few dollars and can involve every kind of consumer debt, from car payments to utility bills to student loans to medical fees.  These trends devastate communities across the country as unmanageable debt and household financial crisis become ubiquitous, and they impact Black and Latino communities most harshly due to longstanding racial and ethnic gaps in poverty and wealth.

Debtors’ prisons were abolished by Congress in 1833 and are thought to be a relic of the Dickensian past.  In reality, private debt collectors — empowered by the courts and prosecutors’ offices — are using the criminal justice system to punish debtors and terrorize them into paying even when a debt is in dispute or when a debtor has no ability to pay.

The criminalization of private debt happens when judges, at the request of collection agencies, issue arrest warrants for people who failed to appear in court to deal with unpaid civil debt judgments. In many cases, the debtors were unaware they were sued or had not received notice to show up in court.  Tens of thousands of these warrants are issued annually, but the total number is unknown because states and local courts do not typically track these orders as a category of arrest warrants.

In a review of court records, the ACLU examined more than 1,000 cases in which civil court judges issued arrest warrants for debtors, sometimes to collect amounts as small as $28.  These cases took place in 26 states — Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Washington, and Wisconsin — and Puerto Rico and the Northern Mariana Islands.

Even without arrest warrants, the mere threat of jail can be effective in extracting payment — even if that threat is legally unfounded. In the case of debts involving bounced checks, private collection companies now have contracts with more than 200 district attorneys’ offices that allow them to use the prosecutor’s seal and signature on repayment demand letters.  It’s estimated that more than 1 million consumers each year receive such letters threatening criminal prosecution and jail time if they do not pay up.  But review of company practices has documented that letters often falsely misrepresent the threat of prosecution as a means of coercing payments from unknowing consumers.

February 22, 2018 at 06:44 PM | Permalink


So this is not debtor prison. This is contempt of court prison. The article is a little misleading.

Posted by: David Behar | Feb 22, 2018 6:50:19 PM

When you get a subpoena, can you call the clerk and reschedule for a more convenient day?

Posted by: David Behar | Feb 22, 2018 6:53:14 PM

No, you can't. When the court subpoenas you to come on a certain date and time, you have to be there at that date and time.

Posted by: Erik M | Feb 22, 2018 10:01:22 PM

Erik. Then there is this. "...had not received notice to show up in court."

Isn't evidence of notice required by the Fifth Amendment procedural due process? At least get a signed certified mail receipt, if not an attestation by a sheriff?

Posted by: David Behar | Feb 23, 2018 1:28:27 AM

Criminalization of bounced checks (which is framed as a fraud offense rather than a debt offense, but doesn't always involve fraud) is particularly problematic because, as I have learned from representing clients facing that charge, bounced checks are often written by identity thieves, resulting in criminal charges directed at someone who is already a crime victim, in a situation that is expensive to clear up (and not very procedurally well structured) even with a lawyer.

Posted by: ohwilleke | Feb 26, 2018 2:16:55 PM

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