Debtors' prisons have been illegal in the U.S. since the 19th century. Not only was the practice of imprisoning people because they owed money cruel, it was also a pretty ineffective way of dealing with insolvency, since people in debtors' prisons were unable to maximize their earning capacity to repay their debts, if they were able to work at all.

It's not a crime to owe money, but major debt collection companies across the nation have found a way around that: debt warrants.

In a typical debt collection process, a debt collector gets a court judgment to force the delinquent borrower to pay. If the debtor doesn't comply with that order, the court may hold the debtor issue a contempt citation and a warrant.

According to a recent investigative feature in the Minneapolis Star Tribune, some debt collectors are taking these contempt orders to the police and having them enforced.

"The law enforcement system has unwittingly become a tool of the debt collectors," added Michael Kinkley, an attorney in Spokane, Wash., who represents arrested debtors. "The debt collectors are abusing the system and intimidating people, and law enforcement is going along with it."

Taxpayers foot the bill for the entire process, from the arresting police officers to jail accommodations and court expenses. "We hear every day about how there's no money for public services," one debtor who was arrested on a debt warrant pointed out to the Star Tribune. "But it seems like the collectors have found a way to get the police to do their work."

No national statistics are kept on how many people have been arrested on debt warrants. However, consumer attorneys have noticed an uptick in debt-warrant arrests in a number of states, including Arizona and Washington.

Enforcement varies from state to state and even between different counties within states. Whether police will spend time actively seeking people wanted on debt-related contempt-of-court warrants depends on resources.

According to the Star Tribune, judges in Illinois and Indiana have ordered jail time for debtors because they missed court-ordered payments on debt, which could include Chapter 13 bankruptcy plan payments. One Kenney, Illinois, man was sentenced to remain in jail until he came up with $300 he owed to a lumber yard.

Why do debtors ignore the warning signs that a debt warrant will be issued? One answer is that their debts have likely been sold several times to different debt collection agencies. They may simply not know who is calling or mailing things to them.

"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 law professor at Southern Methodist University's Dedman School of Law in Dallas.

Unfortunately, people being jailed for debt are typically among the least likely to be able to pay.

"It's just one more blow for people who are already struggling," said Beverly Yang, a legal aid attorney in Illinois. "They don't like being in court. They don't have cars. And if they had money to pay these collectors, they would."

"The question always crosses my mind: 'Are the cops going to arrest me again?'" one debtor told the Star Tribune. "So long as I've got unpaid bills, the threat is there."

Related Resource

"In jail for being in debt" (Minneapolis Star Tribune, June 9, 2010)