Debt Collectors (Don't) Want to Send Debtors to Prison

Charles Dickens’s father was sent to the Marshalsea debtors’ prison, ostensibly over a loaf of bread. (In reality, it’s just that the baker got to court first; there were several people in line behind the baker, each with his own list of unpaid receipts.)

Victorian debtors’ prisons were odd beasts. Many allowed you to continue conducting business — as long as you could conduct your business remotely, using letters and runners. That business-running was important, because ironically Victorian debtors’ prisons required the debtor to pay his keep. So, even if one were lucky enough to pay back the baker and the banker, if one still owed money to the prison, one would remain imprisoned.

I mention all of this (and you’re welcome) because, if you’ve paid attention to the news recently, debtors’ prison are hot hot hot again! You may have missed this at your last staff meeting — maybe you made a quick duck into the restroom or you were re-filling your water bottle — but collection agencies everywhere are arresting debtors and putting them in prison.

Because that makes sense!

Here are three news sites where we’ve found variations on that story, all of which stem from a recent Wall Street Journal article:

Chicago Tribune: Madigan pushing to limit debt collectors’ use of arrest warrants

Business Insider: THE RETURN OF DEBTORS PRISONS: Collection Agencies Now Want Deadbeats Arrested And Sent To The Big House

Huffington Post: Debtors’ Prison Legal In More Than One-Third Of U.S. States

None of the stories necessarily run with facts. They run with allegations and feelings. The Chicago Tribune writes, “Madigan said she has grown increasingly concerned that borrowers sometimes are being thrown into jail without even knowing they were sued, a problem she blames on sloppy, incomplete or false paperwork submitted to courts.” Two of the three stories rehash the same anecdote to illustrate this point, that of a woman named Victoria Joy, arrested after a tail-light violation.

“They cuffed me in front of my kids. That was terrifying,” said Joy. Joy also claims that she didn’t know about the lawsuit or judge’s order until her arrest.

If that’s true — and we’re not taking a stand one way or the other — that points more towards limitations in the judicial system, and not anything within the purview of the collections industry.

Also, the distinction that none of these stories really takes the time to make is this: The arrests are generally the result of judicial non-compliance, not the debt itself. Folks have been issued a court date, which they missed. This is not to say that arrest warrants for debtors are out of the question. Currently there are six states — Arkansas, Arizona, Illinois, Indiana, Minnesota, and Washington — that allow debt collectors to seek arrest warrants for debtors in default if all other collection methods have failed.

However, it’s a more provocative story to just run with “DEBT COLLECTORS WANT TO SEND YOU TO PRISON.”