Payday Loans, Non-Payment, Default Judgement, Warrant, Incarceration — What About Due Process

This makes my blood boil.

As reported in the St Louis Post Dispatch, and picked up by the Brennan Center:

Still, people do go to jail over private debt. It’s a regular occurrence in metro St. Louis, on both sides of the Mississippi River.

Here’s how it happens: A creditor gets a civil judgment against the debtor. Then the creditor’s lawyer calls the debtor to an “examination” in civil court, where they are asked about bank accounts and other assets the creditor might seize.

If the debtor doesn’t show, the creditor asks the court for a “body attachment.” That’s an order to arrest the debtor and hold him or her until a court hearing, or until the debtor posts bond.

The practice draws fire from legal aid attorneys and some politicians. They call it modern-day debtors prison, a way to squeeze money out of people with little legal knowledge.

Debtors are sometimes summoned to court repeatedly, increasing chances that they’ll miss a date and be arrested. Critics note that judges often set the debtor’s release bond at the amount of the debt and turn the bond money over to the creditor — essentially turning publicly financed police and court employees into private debt collectors for predatory lenders.

Bottom line — people are going to jail for private debts they can not pay, and without a practical or meaningful opportunity to challenge their ability to pay.

The legal analysis is perhaps not simple as simple as it should be.  At each stage, let us assume, people are getting some form of notice and opportunity to be heard.  But, as in Turner, the procedures, taken as a whole, do not support fairness and accuracy, but allow imprisonment for failure to pay money that people can not pay. Maybe this is a right to counsel argument — if current procedures are resulting in frequent incarcerations for those who have not been meaningfully heard, either better protections have to be put in place to ensure that they are heard, or they have to be given counsel.  Something tells me we would get the protections.

As noted in the Post Dispatch article, Illinois has a statutory fix, Illinois Public Act 097-0848.

Illinois Deputy Attorney General for Child Support Enforcement, Diane M. Potts, has provided us with this summary of the new law:

For Citations to Discover Assets, creditors must now:
1)    Personally serve the debtor
2)    Use a modified notice form that more clearly articulates the possibility of incarceration for failure to appear
3)    Serve a new Income and Asset Form designed to show any exempt assets/income of the debtor
4)    Allow the debtor an opportunity at trial to assert his exemptions
And the Court must now dismiss the citation if the debtor does not possess any non-exempt income or assets.
For body attachments/warrants for arrest issued on a charge of indirect civil contempt, either for failure to appear or for failure to pay:
1)    The debtor must be personally served with an order to show to cause
2)    The body attachment/warrant expires one year after the date of issue
3)    The court must return the bond to the debtor unless the court finds that (i) the debtor has willfully refused to comply with the payment order and (ii) the bond constitutes non-exempt funds of the debtor.
The new law applies to all creditor/debtor situations, including child support debt.

Thanks both for the new law, and for the information about it.  A good model to consider.


About richardzorza

I am deeply involved in access to justice and the patient voice movement.
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