It's Baaaaccckkkk - Debtors Prison

[NickHedge]

That's right folks, DEBTORS PRISON. You owe money? Better watch out. If your state is strapped for cash you might find yourself arrested. Check out the following information:

The Return of Debtors Prison - Jailed for Debt
July 13, 2010

It's not a crime to owe money, and debtors' prisons were abolished in the United States in the 19th century. But people are routinely jailed for debt. "The law-enforcement system has unwittingly become a tool of the debt collectors," said Michael Kinkley, an attorney in Spokane, Washington (map), who has represented debtors. "The debt collectors are abusing the system and intimidating people, and law enforcement is going along with it."

Arrests are taking place across the country, and collection companies are making huge profits. Here's what's happening.

Take Joy Uhlmeyer, who had been arrested while driving home to Richfield, Minn., after a visit with her mother. Uhlmeyer spent a night in a holding cell. Then, handcuffed in a squad car, she was taken to Minneapolis for booking. Finally, after 16 hours in limbo, jail officials fingerprinted Uhlmeyer and explained her offense.

Last spring, Deborah Poplawski was digging for coins to feed a parking meter when she saw the flashing lights of a police car. She was arrested, not for parking illegally, but for a small credit card debt. How much?

Thanks to interest and fees, Poplawski was on the hook for a lot more than her original debt. Less than a month earlier, she learned by chance that she had an outstanding warrant. A debt buyer had sued her, but she says nobody served her with court documents. She spent nearly 25 hours in the Hennepin County jail. The judge told her to fill out a form listing her assets. A debt collection firm used this information to seize her bank account.

How often are debtors arrested across the country? No one can say. No national statistics are kept, and the practice is largely unnoticed. "My suspicion is the debt collection industry does not want the world to know these arrests are happening, because the practice would be widely condemned," said Robert Hobbs of the National Consumer Law Center in Boston.

Whether a debtor is locked up depends largely on where the person lives, because enforcement is inconsistent. Arrests are increasing in certain states, driven by a bad economy, high consumer debt and a growing industry that buys debt and employs every means available to collect. In one state with particularly creditor-friendly laws, debtor arrests have increased sharply.

In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January, a judge sentenced an Illinois man "to indefinite incarceration" until he came up with this amount toward a lumber yard debt.

Few debtors realize they can land in jail. Debtors also may not recognize the names of companies seeking to collect debts. "They may think it's a mistake. They may think it's a scam. They may not realize how important it is to respond," said Mary Spector, a professor at Southern Methodist University's Dedman School of Law.

The debts -- often five or six years old -- are purchased for a few cents on the dollar. A debt collection firm aims to collect at least twice what it paid for the debt. Last year, two of the largest firms earned huge profits--profits three times higher than annual Wal-Mart profits.


Link: http://specials.msn.com/A-List/Jailed-fo...ageindex=1