The news reports are that people are going to jail for unpaid payday loans debt when it is actually for not following the orders of a judge. The story unfolds with multiple tales of people going to jail for unpaid debt. The focus of course is targeted at the payday loan industry. When debt is defaulted upon, the creditor has the right to pursue legal action in the attempt to get paid.
A creditor will inform a debtor that legal action will be pursued. A creditor has the full right to attempt to gain a civil judgment to regain funds. The debtor will receive a date and time to appear before the judge. This is the piece that many ignore or forget, this request to appear is not made by the creditor but by the judge.
When you skip this appointment, the judge will automatically rule in the creditor’s favor. The defendant will be charged to repay all debt plus court costs and service fees. Once this fine has been imposed, the creditor can call the debtor to an “examination” in civil court. They will be asked about bank accounts and any other assets which the creditor may seize for payment. If the debtor does not show up, the creditor can then request that the court ask for a “body attachment”. This is when there is an order of arrest is placed upon the debtor. It is termed modern day debtors prison. Those people who have little knowledge of how the court systems work will find them trapped in legal ways to squeeze money from them.
Payday loan creditors may follow all legal recourse to obtain payment in full.
Illegal debt collections are forbidden by any creditor. There are some states which do not allow “debtor’s prison”, but the St. Louis area on both sides of the Mississippi River, this practice happens on a regular basis. According to Missouri Bill of Rights, their constitution states that nobody can be imprisoned for debt except if the fines and penalties are issued by law.
There are times that the court system does not let the problem end with debtor’s prison. Sometimes the courts summons the debtor to court repeatedly as the creditor is hoping that one of the dates will be missed. Often a judge will set the release bond for the amount owed to the creditor then turn the money over to pay for the debt. The courts and police end up being debt collectors for the lenders. Tax money is being spent and the lenders are labeled predatory even though they are following the law.
When the state government sets rules and regulations in place, as well as have their constitution condone practices, it would depend on which side of the line you are standing on to state an opinion. Here are the two opposing opinions:
- These predatory lenders are taking advantage of the law to collect money from people in a financial mess. It is a legal way to threaten jail time in order to collect money. The Fair Debt Collections and Practices Act protect people from such threats and this method is just manipulation of the courts.
- Those who do not sympathize with the debtors have two rebuttals. One being that if you don’t have the money to pay back the loan, then there is no reason to obtain a loan. The second being, if a judge orders you to go to court, you need to show up. The debtor’s prison is only applied to those who do not show up.
The arrest often gets the debt paid. The bonds, which are set by the judge, get used to repay the fees. The amount of debtors who actually go to jail is a small percentage of those who get have civil judgments against them. For those who end up in jail, it is a sad story, but preventable.
Spotya! Online Payday Loans does not promote collections practices such as this, but it reinforces the need for both parties to act responsibly with loan transactions.
