Can You Go to Jail for Credit Card Debt?

• December 29, 2020
• Bankruptcy

“Can you go to jail for credit card debt?” is a common question among consumers struggling with overwhelming debt. The short answer is “no,” because “Debtor’s Prisons” were an archaic tool used by lenders in the 1700s and 1800s in the U.S. to punish poor people who didn’t pay their debts. Debtor’s prisons were eliminated in many U.S. states in the mid-1800s and are now non-existent. The U.S. government has outlawed imprisonment for failure to pay a debt.

However, there is a movement afoot among creditors to skirt this mandate by filing legal action against a debtor, and if the debtor fails to show up for a court hearing, then a judge can, in fact, send the debtor to jail for contempt of court. So, the person isn’t going to jail for the debt itself but is going to jail for failure to show up for a hearing. The person then has to post bail to be released from jail.

What all of this shows is that it’s important to know your legal rights if you’re in debt, particularly if you are being harassed by creditors through phone calls and letters. These creditors may be threatening you with legal action among other onerous debt-collection practices. To explore your options and learn more about your rights under the law, contact attorney and CPA Jerry E. Smith. He has helped countless clients just like you face their debt, create a proactive plan, and step forward into a brighter future. We are compassionate and caring, and we understand that you are likely stressed and fearful about your situation. To learn more about how our law firm can help, call us at 317-917-8680.

Can you go to jail for debt in Indiana?

A person does not go to jail for debt in Indiana. But a person can be arrested and held in jail, pending arraignment and bond, for contempt of court if he or she fails to show up for a court hearing arising from unpaid debt. The American Civil Liberties Union (ACLU) published a report titled “The Criminalization of Private Debt” outlining cases in which U.S. citizens were jailed after a judge ruled they were in contempt of court for failing to show up for court hearings related to debt. According to the report, 44 states – including Indiana – as well as federal rules related to bankruptcy allow a person to be arrested for contempt of court.

This is just one example of why it’s important to deal with debt problems promptly. The earlier, the better. When facing overwhelming debt, it’s tempting to just throw unopened overdue bills in a pile on the counter and not look at them for months. Afterall, debt is scary. But this is absolutely the wrong approach. The last thing you want is for your overdue bills to be sent to collections agencies, which can become aggressive and threaten litigation as part of their efforts to collect a debt.

There is an easier, proactive way for you to deal with significant debt. It starts with a phone call to attorney Jerry E. Smith to find out more about your legal rights. He can help you explore your options, including Chapter 7 or Chapter 13 bankruptcy. Our legal team understands that you may feel fear and shame about your debt, but you don’t have to. We know that many responsible, caring people can find themselves in debt due to unforeseen circumstances like job loss, serious illness and other economic factors. Attorney Jerry E. Smith offers compassion and peace of mind as he walks you through the entire legal process and answers all of your questions. For a free one-hour consultation about your situation, call us at 317-917-8680.

Attorney and CPA Jerry E. Smith practices bankruptcy law and tax resolution. Smith’s practice focuses on representing consumer debtors and assisting them in getting a fresh start by reorganizing or eliminating their debt and attempting to put them in the best financial position possible.

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Can you go to jail for not paying your credit card bills?

The Fair Debt Collection Practices Act (FDCPA) lays out in detail what is and is not allowed under federal law when it comes to debt collection. It also addresses the reality that some debt collectors engage in unsavory and abusive methods when trying to collect a debt. The FDCPA and the Federal Trade Commission (FTC) are resources that can help explain consumers’ rights.

Generally, a person cannot be sent to jail for failure to pay debts such as credit cards, medical bills, personal loans and other forms of consumer debt. Debt such as child support and spousal maintenance fall under a different category, and there can be separate legal implications for failure to pay these kinds of debts.

What are the different kinds of personal bankruptcy?

Depending on your financial circumstances, you may want to explore either Chapter 7 or Chapter 13 bankruptcy as a way of dealing with excessive debt. Following is a brief description of both:

Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common and simplest type of bankruptcy protection for individuals. It is often referred to as “liquidation bankruptcy,” which means that assets are often sold to pay secured debt to creditors. Chapter 7 is also sometimes used by small businesses. After liquidating assets to pay secured debt, most or all of your unsecured debt is discharged. This includes credit cards, personal loans, department store credit, and other similar debt. Student loans, alimony and child support typically cannot be eliminated through bankruptcy.

Chapter 13 Bankruptcy
Often referred to as a reorganization or “wage earner bankruptcy,” Chapter 13 bankruptcy is a process whereby an individual with a steady income but overwhelming debt can pause and reestablish their financial footing while continuing to meet some of their debt obligations. For example, Chapter 13 halts any foreclosure action and allows you to remain in your family home. Chapter 13 allows you to repay a portion of your debt obligation through a court-approved repayment plan. Remaining eligible debt is discharged after you have completed the repayment plan. Chapter 13 can be used to do a personal or business (sole proprietorship) reorganization.

Call Attorney Jerry E. Smith for Debt Help Today

Overwhelming debt can be scary, but sometimes our huge fears of the unknown are worse than the reality itself. Information is power, and gathering information is the first step toward a brighter future. Take control of your situation by exploring your rights and finding out about the legal options available to you. Should you choose to pursue bankruptcy, you can put an immediate end to those harassing calls and letters from creditors. You can catch your breath and create an orderly plan to move forward. Attorney Jerry E. Smith wants you to know that you are not alone. His legal team is here to help. To find out more about how to turn the corner on debt and get a fresh start, call attorney Jerry E. Smith at 317-917-8680. We offer one-hour free consultations, so what do you have to lose?