The WSJ Law Blog wrote about a phenomenon that most think is all but extinct in the United States, debtor’s prison. Guess what?
More than a third of all U.S. states allow borrowers who can’t or won’t pay to be jailed. Judges have signed off on more than 5,000 such warrants since the start of 2010 in nine counties with a total population of 13.6 million people, according to a tally by The Wall Street Journal of filings in those counties. Nationwide figures aren’t known because many courts don’t keep track of warrants by alleged offense. In interviews, 20 judges across the nation said the number of borrowers threatened with arrest in their courtrooms has surged since the financial crisis began.
This is somewhat misleading, as the warrants are issued for the failure of debtors to appear and being held in contempt, not simply because there is a debt. Still, but for the debt, there would be no compulsion to appear. No matter how one spins it, it’s all about the debt.
The unspoken problem is that debt collection has become a cesspool, with failed service, bad information generating flawed complaints and the wrong people being subject to unwarranted litigation. The news about these problems is pervasive, but there has been little mentioned about the consequences, the jailing of those whose never knew they were in trouble to begin with.
In September 2009, Jeffrey Stearns, a concrete-company owner, answered a knock at the door from a Hancock County, Ind., deputy sheriff. The deputy was holding a warrant to arrest Stearns for not paying $4,024.88 owed to a unit of American International Group Inc. on a loan for his pickup truck.
After being handcuffed in front of his four children, Stearns, 29 years old, spent two nights in jail, where he said he was strip-searched and sprayed for lice. Court records show he was released after agreeing to pay $1,500 to the loan company. “I didn’t even know I was being sued,” he said, though he doesn’t dispute owing the money. “It’s the scariest thing that ever happened to me.”
This isn’t about being sympathetic to those who lived high on the hog on someone else’s money, then ran from their responsibility when the bill came due. A debt is a debt, and repayment is part of the obligation that one undertakes when accepting the money. If a loan was taken foolishly, without intention of repayment, then they deserve to face consequences.\
But those consequences don’t include arrest and incarceration.
Most of the people unable to repay their debts aren’t intentional deadbeats, but people who have been swept up in the very same economic collapse that affected everyone. The businesses to whom the debt is owed know it. The judges ought to know it too. That circumstances have precluded a person from repaying (you can’t get blood from a rock) doesn’t mean that the lender isn’t harmed or isn’t due repayment, but that the debtor isn’t malevolent, but without the power to comply. We don’t jail people for misfortune. Not even foolish misfortune.
In those instances where a debtor engaged in fraud, accepting money with no intention of ever repaying, the situation is different. Fraud may well be a crime, and should that be the case, then the criminal law provides recourse. Let the debtor seek the aid of prosecution, affording the debtor and alleged criminal the full panoply of rights and protections given anyone accused of a crime. If fraud is proven, the impose the punishment appropriate for the crime. Not because it’s a debt, but because it’s a crime to defraud.
The rationalization of lawyers representing lenders, assuming they aren’t the ones suing the wrong people without proper papers, minimal diligence and a modicum of regard for misapplied process, is severely misguided. They explain that the debtor owes money and they are entitled to compel the miscreant to come to court and disclose the whereabouts of their assets, upon pain of incarceration. This is an anachronism that, sadly, remains part of our common papers, the old fine or imprisonment language we use to make people do as we demand.
This is nothing more than a throwback to the debtor prison days, when cash was king and the poor deserved whatever they got. It’s time we adjusted both the language and the reality to reflect the fact that we no longer jail people for debts. Yet that doesn’t seem to be the level of concern.
But now a backlash is building against use of the debtor’s prison. It’s a reaction to sloppy, incomplete or even false documentation that can result in borrowers having no idea before being locked up that they were sued to collect an outstanding debt.
Certainly those who are jailed due to sloppy, incomplete or false documentation shouldn’t be. That this is characterized as a mere “backlash” is outrageous. The idea of jailing someone as a product of a wrong committed by the party seeking the jailing shouldn’t present any question at all. Of course it’s wrong, and this should never happen or be allowed to happen. This isn’t a backlash at all, but a gaping flaw in the legal system that demands the immediate attention of the courts and a complete fix. Even this appears to be mired in controversy, though there should be nothing controversial about it.
In the meantime, what about instances where the problem isn’t sloppy, incomplete or false documentation? This doesn’t appear to be of sufficient concern to the courts to put a stop to the jailing of debtors. Few of us realized that this nation, with an incarceration rate that makes Banana Republic dictators chuckle, still has debtor prisons. We do, and we have judges willing to sign the warrant to put the poor in jail for being poor.
While we fight for those who are accused of crime to prevent them from going to jail, we don’t even notice those who are going to jail without being accused of any crime at all. Anybody have a nice platitude to justify this?