Perhaps like you, many of my clients have been threatened by collection agencies that they will go to jail for not paying their bills. I am not saying that it is impossible, because there are certain types of debts that can be criminally prosecuted if not paid, but the vast majority of debts are not a criminal offense. In fact, there have not been any Debtors’ Prisons in the United States since the 1850s.
If you owe money on a credit card, loan, line of credit, etc., then default on that debt, the creditor can collect against you, but he can’t put you in jail. In fact, the main person that can bring a criminal prosecution against you is the District Attorney. A creditor would have to file a complaint with the police and try to get the District Attorney to file charges against you. Most District Attorneys are more preoccupied with catching murderers, thieves, etc. They don’t have time to mess around with a civil matter.
There are certain exceptions to this general rule, however. If you do not pay your child support, there is a possibility of going to jail. If you do not pay the Internal Revenue Service, there is a possibility of going to jail. If you write a bad check, there is a possibility of going to jail. There are a few others, but these 3 items are the main exceptions to the rule. This last one is where most payday loan companies try to catch you. If you wrote them a check or pre-authorized them to deduct money from your account, it can be seen as a bad check and they will certainly threaten you with criminal prosecution. Even though I have heard this for 16 plus years from payday loan companies, I have never once seen the District Attorney file charges in one of these types of debts among my clients.
If a collection agency is falsely threatening to put you in jail, they are in violation of § 807 of the Fair Debt Collection Practices Act and you can sue them for this violation to collect damages and attorneys’ fees. You would need to be able to prove that they made the threat in order to sue.
If a creditor is harassing you and threatening you, please give me a call right away. I offer a free consultation where we can discuss the benefits of filing either a Chapter 7 or a Chapter 13 bankruptcy to stop debt collectors from harassing you. Please call me at 281-847-4345 to schedule a free consultation to see how we can help you.