Main Street

A New Breed of Debtors Prison

Read this while I catch my breath:

It’s not a crime to owe money, and debtors’ prisons were abolished in the United States in the 19th century. But people are routinely being thrown in jail for failing to pay debts. In Minnesota, which has some of the most creditor-friendly laws in the country, the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009, a Star Tribune analysis of state court data has found.

-snip-

Taxpayers foot the bill for arresting and jailing debtors. In many cases, Minnesota judges set bail at the amount owed.

In Minnesota, judges have issued arrest warrants for people who owe as little as $85 — less than half the cost of housing an inmate overnight. Debtors targeted for arrest owed a median of $3,512 in 2009, up from $2,201 five years ago.

It’s a long article worth reading in full, if you can stand to. Basically, debt collection agencies are using the police and courts to collect debts, at—and I know this is in the excerpt above but I’m going to repeat it—at taxpayer expense.

How does this work when we don’t have official debtors prisons? Simple. The collection agency sends you a notice. If you don’t show up in court, you can be arrested for contempt. And then your bail is set at the amount you owe. So the collection agency gets its money, and the costs of police carrying out an arrest and some jail time, those the agency doesn’t worry about. Minnesota’s taxpayers have it covered.

There are so many things wrong with this picture I can’t begin to identify them all.

(h/t commenter Jojo)

Tags: debt, predatory economy