Earlier this week, an article appeared in the Minneapolis-St.Paul Star Tribune describing how some citizens of the state of Minnesota are being sent to jail for having past due credit card debt. As much as I hate to say it, apparently this is really happening.
However, the article is somewhat misleading because the actual reason why these people were arrested was for allegedly failing to comply with a court order or failing to appear for a court hearing in connection with the debt, not the fact that the debt was unpaid. In other words, the people in the article were jailed for a legal technicality.
Although some debt collectors would like you to believe that you can be arrested for an unpaid debt, it is not a crime to owe money. Debtors’ prisons were legally abolished in the United States in 1869.
However, some debt collectors are just plain ruthless in their collection tactics and they’ll stop at nothing in trying to intimidate people into paying. According to attorney, Michael Kinkley of Spokane, WA, “The law enforcement system has unwittingly become a tool of the debt collectors. Debt collectors are abusing the system and intimidating people, and law enforcement is going along with it.”
What’s Really Going On Here
I believe this article will be one of many news stories that will be “leaked” to the press as part of an ongoing public relations campaign by creditors and debt collectors in an attempt to demonize people with outstanding debts. Their goal will be to try and instill a belief in the public consciousness that anyone with an outstanding debt is an evil, immoral, irresponsible, good-for-nothing, low-life scumbag that needs to be locked up if they can’t pay.
And no, I’m not a conspiracy theorist. I honestly believe this is what’s really going on here.
If you go back to the Star Tribune article, one of the people that was jailed had a measly $250 debt, yet they chose to make an example out of her and “send a message” to anyone else that might owe money. As previously mentioned, certain creditors would like you to believe that past due debt equates to jail time, when in reality that’s not how things really work.
For Some Creditors, It’s Better To Be Feared Than Loved
In my consulting practice over the past 15 years, I’ve talked with several thousand people in all stages of financial distress. And make no mistake, the biggest fear that people have is with regard to the legal system. They are scared to death of lawyers, lawsuits, courts and judges. And I don’t blame them one bit.
But don’t think creditors and debt collectors don’t know this. They absolutely do, and they’re doing their best to exploit this fear.
However, my experience is that the vast majority of people with past due debt do not get sued. Lawsuits take time and money. In addition, suing someone does not guarantee that a creditor will recover any money. As the old saying goes, “You can’t squeeze blood from a turnip.” Creditors are very aware of this as well.
So if you’re having financial challenges right now, just keep your head up and do your best. That’s all you can do. And don’t worry about the debt police because you cannot be arrested for an unpaid debt.
If you’d like to read the full article from the Star Tribune, here’s the link: