The Rich Get Richer From Tanking the Economy As The Poor Go To Jail For a Missed Payment

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DebtorsPrison

There is little argument that America is home to a disproportionate prison population for crimes that boggle the mind when one considers there are no victims and imprisonment will not serve to rehabilitate a prisoner. Before 1833, Americans were sent to prison for unpaid debt, and it is a practice that rightly is associated with Dickensian England and certainly not 21st century America, but with jobs nearly impossible to find after the Great Recession and tepid economic recovery, debtor’s prisons have been making a comeback despite they have been illegal in the United States since 1833. In a new report by the American Civil Liberties Union of Ohio, they detail how “Ohio’s Debtors’ Prisons Are Ruining Lives and Costing Communities” because Ohio courts are illegally jailing poor people for their inability to pay their debt.

The ACLU report reveals that there is a “harrowing debtors’ prison” system in Ohio  that violates both the United States and  Ohio constitutions, and that many Ohio residents are sent to prison for debts “as small as a few hundred dollars” in spite of being in violation of the state and Federal Constitution. They also exposed economic evidence that in many cases it is costing the state more to send and keep a debtor in prison than the amount of the debt they owe. Some of the statistics in the ACLU report are that in the “second half of last year, more than one in every five of all bookings in the Huron County jail originating from Norwalk Municipal Court cases involved a failure to pay fines,” and that in “suburban Cleveland, Parma Municipal Court jailed at least 45 defendants for failure to pay fines and costs between July 15 and August 31, 2012,” and that during the same period at least 75 people were thrown in jail for similar charges in the Sandusky Municipal Court.

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In several cases, people were sent to prison for missing payments on fines levied against them for some other infraction, such as a woman who spent ten days in jail for not paying $300 in fines for a traffic ticket and when she got out of jail, she owed an additional $200. Her husband is also serving time in jail for overdue fines and both are unemployed. It is not unusual for a court to give a person the option of paying a fine or serving out jail time in lieu of payment, but it most states it is always an option. It is curious though, why a judge would send someone to prison for their inability to pay, and yet not discount their fines according to the time served which happened to a man who owed $1,500 in fines and court costs, was sent to prison in Wisconsin for three-and-a-half years, and still struggles to repay the fines.

There are other states throwing people in jail and debtors’ prison because of sloppy paperwork on the part of credit collection agencies who most likely had nothing to do with the original debt. It is a common practice for hospitals, retailers, and small businesses to sell their debt to collection agencies whether or not a debtor defaulted on a loan or outstanding bill. Often, if a debtor is late or misses one month repaying their debt, the creditor immediately turns (sells) the debt over to a collection agency that takes legal action the debtor may be unaware of. Without knowledge they are being sued for the debt by an unknown collection agency, the person cannot possibly go to court to face the charges and the judge automatically issues an arrest warrant for the debtor for failure to appear or contempt of court.

Without knowledge they were sued by creditors and a warrant for their arrest was issued, they are taken unawares and arrested and jailed without knowledge that they “failed to appear” before the court. For example, a woman was pulled over for a loud muffler in Illinois and instead of a fix-it ticket or just a warning, the officer arrested her and took her to jail and later she discovered the court issued an arrest warrant for failing to appear. The woman owed $730 for a medical bill and had no idea the collection agency bought the debt or filed the lawsuit against her, and without the court or creditor giving her notification she had to appear in court, she missed the date and went to jail.

Even though debtors’ prisons have been banned explicitly by states’ and the Federal Constitution, over a third of the states allow borrowers to be jailed whether they were unable to pay because their jobs were eliminated due to the recession or a medical emergency racked up enormous debt. In fact, another report by the ACLU found that many people are imprisoned regardless the cost of keeping them in jail far exceeded the amount of debt they owed. In one case in Louisiana, a homeless construction worker was imprisoned for five months for legal debt of $498 while his jail time cost six times as much, and the debtor was forced to pay for his own incarceration. In 2010, the Federal Trade Commission received more than 140,000 complaints related to debt collection practices and they have taken 10 collection agencies to court for unfair practices in the past three years.

Since 2010, judges, who like debtors, do not know the debtor’s rights signed more than 5,000 arrest warrants in just nine counties, and one legal aid attorney said it is not uncommon for the accused to be intimidated by the judge into making unfair repayment agreements after facing interrogation by judges about why they cannot pay more and if they are really looking for a job; in this economy and regardless if it is an emergency medical debt or not. Collection agencies have an incentive to use needlessly harsh tactics, including seeking judgments and threats of jail time, because debt collection is a very lucrative business, especially in a down economy when people have lost their jobs through no fault of their own.

It is beyond the pale that in 2013, there are Americans being thrown in debtors’ prison when in most cases the people fail to keep up timely payments because they either lost their job, are uninsured and had a medical emergency, or can only find part-time minimum wage jobs if they are fortunate. One hopes that the ACLU of Ohio’s exhaustive report shines a light on the problem, and court officials pledged to look into the accusations, but that does not help any of the people who are thrown in prison for something as minor as missing a single payment that was sold to a collection agency that promptly secures a court judgment against the person unawares.

There are people who deliberately skip out on their debt commitments, and it reached a high point during the housing crisis where people just walked away from their mortgages with little or no consequences except a blemish on their credit record. There are other Americans who are without healthcare insurance and face a life-threatening illness that disables them, and their debt to the hospital is promptly sold to a credit collection agency that takes legal action to force them into a repayment plan they can hardly afford, but when given the choice of promising to repay a debt they can never keep up with or go directly to prison, most people will accept succumb to the court and collection agency’s pressure and still wind up in debtors’ prison when they are in contempt of court for not following the details of their debt settlement. It is a no-win situation and as usual, it is the poor and unfortunate who wind up sitting in America’s prisons while filthy rich bankers and Wall Street CEOs are luxuriating in style after fleecing the people, the economy, and their investors with impunity. But that is America, where the rich are granted immunity from prosecution for robbing billions of dollars from millions of Americans and the poor are thrown in prison for missing a payment for their catastrophic health emergency.

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