Debt Collection Companies Have Hijacked the Justice System

Denise Zencka, a mother of three in Indiana, had to file for bankruptcy because she couldn’t afford to repay her bills for treatment for thyroid cancer. And because she was unable to work, she had to stay with her parents in Florida while she recovered. She didn’t know that during that time, at the request of a debt collector seeking to collect outstanding medical bills, a small claims court judge had issued three warrants for her arrest. When she returned to Indiana, she was arrested by local sheriff’s deputies for the private debt she owed. Once at the jail, and being too sick to climb the stairs to the women’s section, she was held in a men’s mental health unit. Its glass walls allowed the male prisoners to watch everything she did, including using the toilet.

As in Zencka’s case, and in thousands of other similar cases around the country, courts are issuing arrest warrants and serving as taxpayer-funded tools of the multi-billion-dollar debt collection industry.

Debtors’ prisons were abolished by Congress in 1833. They are often thought to be a relic of the Dickensian past. In reality, private debt collectors are using the courts to get debtors arrested and to terrorize them into paying, even when a debt is in dispute or when the debtor has no ability to pay.

Tens of thousands of arrest warrants are issued annually for people who fail to appear in court to deal with unpaid civil debt judgments. In investigating this issue for the new ACLU report, “A Pound of Flesh,” we examined more than 1,000 cases in 26 states, in which civil court judges issued arrest warrants for debtors. The debtors were often unaware that they had been sued. In many cases, they had not received notice to show up in court.

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Arrest warrants were issued in cases involving every kind of consumer debt or loan, including debts as small as $28. People have been arrested for debts arising from medical fees, federal and private student loans, car payments, unpaid rent, daycare fees, small-business loans, credit card bills, foreclosure deficiencies, high-interest payday loans, and gym fees, to name just a few types.

The process starts when a debt collector files a lawsuit, and it snowballs from there. Each year, collectors flood small-claims and other state courts with millions of suits seeking repayment. Many courts churn through collection suits with almost no scrutiny. Over 95 percent of debt collection suits end in favor of the collector, usually because alleged debtors do not or cannot mount a defense.

Then, with a judgment in hand, creditors can ask courts to require the person to show up in court for “judgment debtor examinations,” at which they are required to answer questions about their finances and assets. If the debtor does not appear for the exam, debt collectors can ask the judge to issue a civil warrant for the debtor’s arrest.

Our investigation found that many people missed their court dates because of work, childcare responsibilities, lack of transportation, physical disability, illness, or because they didn’t receive notification of the court date. We found two cases in which elderly women missed hearings because they were terminally ill. They died shortly after warrants were issued for their arrest. The threat of arrest is an incredibly powerful tactic for collectors. As one lawyer in Texas, who has sought arrests of student loan borrowers, has noted, “It’s easier to settle when the debtor is under arrest.”

Once arrested, a debtor may languish in jail for days until he can arrange to pay bail. Judges sometimes set bail at the exact amount of the judgment. And the bail money often is turned over to the debt collector or creditor as payment against the judgment.

Even when people aren’t arrested, warrants can cause long-lasting harm because they may be entered into background check databases, with serious consequences for future employment, housing applications, education opportunities, and access to security clearances.

Predatory debt collection companies are profiting from Americans who are trapped in debt and on the financial edge as a result of the loss of a job, illness, the death of a family member, or a divorce. The impact of abusive collection practices is particularly harmful to Black and Latino communities, which face longstanding racial and ethnic gaps in poverty and wealth.

There is scant protection from collection abuses under federal and state laws. And even when there are laws in place, abuses remain largely unchecked because regulators rarely intervene to stop them. Unless that changes, the most vulnerable debtors will continue to be victimized by predatory collectors and courts that serve them.

For more on this issue, click here.

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I’m very dubious of this article . Any search on the Internet will Bring up a plethora of information of how you cannot go to jail for a credit card , personal loan , or even a medical bill ever . The only time you are threatened with any sort of a jail recorse is when you are dealing with federal taxes and something that has to do with the federal money cannot go to prison for a $1500 visa debt for instance ....


Stop blaming the collection agencies. There are too many laws in place that one can hardly call someone or send them a letter asking them to pay what they owe without being accused of harassing them. Keep asking for more government regulation and you will see the creditors stop extending credit.


There aren't too many regulations, and the one's there are don't hamper the reasonable collection of debt. I've done work for creditors, and the way some of them operate is ridiculous. I've seen companies sue on debt it turns out they didn't even own.


Here is one thing. If SSDI or any part of other disability is your ONLY income, tell the debt collectors to TAKE A FLYING LEAP. Only the government can garnish you disability. REMEMBER ONLY IF YOUR ONLY INCOME IS DISABILITY, THEY CANT TOUCH IT. LOOK IT UP.


Thank you for the information. I will look it up.


This article sounds like it is written by someone who did zero actual research into these cases and believed everything as told by personal account instead of verifying public record.

First, anyone with even a cursory knowledge of bankruptcy law and the stay it puts on collections has to question the opening paragraph and the curiously omitted details which begs the next question: if she went through bankruptcy, why didn't she include the medical debt?

After that, the story gets more and more bizarre. You cannot be jailed for nonpayment of private debts. You cannot "contract" with DAs or misuse of government seals, this is patently illegal per the FDCPA. What you CAN be jailed for is check fraud (bouncing checks in many states) and disobeying court orders. Which implies an appearance before a judge. Which implies service. Where is the attorney?

So maybe instead of acting like the FDCPA or countless other consumer protection laws don't exist, the ACLU should provide legal counsel to vulnerable people instead of spreading misinformation and denigrating the court system or the people (like the AGs) who ARE actually there to protect people from abusive debt collectors.


A lot of people cannot afford an attorney. Get a clue.


Got news for you. Bankruptcy is intended to prevent the situation described in the opening paragraph, but sometimes, for whatever reason, a creditor or debt collector just doesn't get it. Sure, they are likely to be hit with sanctions by the bankruptcy court. And the sanctions can be severe if the debtor landed in jail due to the debt collector's action (or inaction). Look in the Bankruptcy Reporter and you will find examples. (In re Isrik, 496 B.R. 355, In re Daniels, 316 B.R. 342, In re Atkins, 176 B.R. 998, etc.)

And, yes, as those cases demonstrate, you can be jailed for non-payment of private debts, though technically, as others have noted, the ostensible legal justification for jailing is for failure to appear or contempt of court. The effect is the same. It's entirely a civil process and has nothing to do with a district attorney or other prosecuting authority. It does not involve "the misuse of government seals" as you put it.

So, why would someone not appear in court when ordered ? Sometimes it's sheer stupidity or carelessness. But it could also happen when the person has to care for a sick child. Or perhaps his boss, frustrated because its the third or fourth absence in a couple months, tells him that he'll be fired if he misses another morning of work. Or he thought that he took care of it with the creditor, but he was mistaken or the information never made it to the creditor's attorney (or was simply ignored). Or he simply never received notice of the hearing. It happens.


Jennifer Turner, Please write an article on the Fair Debt Collection Act and what it covers. People need to be educated about the FDCA and what it does to protect the public. Too many people get scared when they receive notice they are being sued, and then do nothing about it. During the housing crisis, had more people been educated as to what their rights were, less folk would have lost their homes.


We once were a country of laws,


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