Look Who has Waded into the Debtor’s Prison "Issue"

It seems like just enough time has passed since the last “debtor’s prison” flare-up, so why not reignite the story? That may have been the thinking when venerable weekly glossy Time posted an article yesterday on one of its online properties.

The piece, titled “Lenders Use a New Dirty Trick to Jail You For Small Debts” was published Tuesday to Time’s Moneyland micro site. The article, like most before it, looks at the practice of “body attachment” used by courts to enforce judgments against debtors, mostly focused on the payday loan sector.

In explaining the process, in admittedly pithy fashion, the piece allows for unethical behavior on the part of creditors/debt collectors, but doesn’t mention that many consumers simply ignore a summons:

Here’s how it works: The creditor goes to court and gets a judgment against the debtor. In many cases, this action is successful only because the debtor never shows up to defend him or herself, sometimes because they’ve been the victim of “sewer service” and never received the paperwork telling them when to show up to court.

The article also discusses a new law in Illinois intended to curtail the body attachment practice while noting such laws are a step in the right direction.

But there is a good piece of concluding advice for consumers reading the story: “pay attention to any notices you receive about court appearances, and make sure you respond and show up as necessary.”

The ARM industry has been dealing with the debtor’s prison story since last fall, when it apparently became fashionable. Trade group ACA International has released at least two press notes this year alone on the matter.