Judgment Debtors

Judgment Debtors: Be Glad We Don’t Use Debtor’s Prison Anymore

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Lose a civil case these days and a judgment is likely to be entered against you. The court will expect you to work with the plaintiff on some sort of payment plan. Even if you do not have the financial means to pay right away, there are other avenues for settling the debt. These include things like wage garnishment and asset seizure. They do not include debtor’s prison. Be thankful that this option is no longer on the table.

Debtor’s prison was pretty common in Europe through the mid-19th century. It was even utilized here in the U.S. until right around the time of the Civil War. Many states still have laws on the books allowing debtors to be sentenced to prison, but such sentences are rarely handed down.

Working Off Your Debt

In the truest sense of the term, debtor’s prison did not really exist. What people were sentenced to was time spent in a secured workhouse with gates and locks. Those who could not pay their debts were sentenced to live and work at the workhouse until they either paid with their labor or made some sort of arrangement to raise funds from outside of prison.

One of the biggest problems with debtor’s prison was that the incarcerated debtors would work to pay for both the cost of their incarceration and their existing debt. Having to pay both out of their meager wages meant taking longer to pay off the original debt. It was not unusual for someone to enter a workhouse and never leave because money could not be earned fast enough.

Modern Debtor’s Prison

The old debtor’s prison workhouse has been extinct in this country for more than a hundred years. However, the term still exists because some states still allow imprisonment for the failure to pay some types of debts. For example, there are states in which deadbeat fathers can be jailed for not paying maintenance payments and child support.

Some states also impose imprisonment as a penalty for not paying criminal fines. In such cases, defendants are not jailed until they pay. They are jailed in lieu of financial payment.

There is another form of modern debtor’s prison that may be utilized following a civil court judgment. Utah is one state that allows this particular action against a debtor. But the action is not the result of a failure to pay, it is the result of a failure to appear before the court.

Not Cooperating with Discovery

Salt Lake City-based Judgment Collectors explains that the law in Utah puts a burden of cooperation on debtors during the discovery phase of collection. If the debtor refuses to cooperate and does not pay their debt, the court can enter and order compelling them to appear and participate in discovery in the courtroom. If the debtor fails to appear, a bench warrant can be issued for their arrest.

That bench warrant could result in anything from a financial penalty to jail time. If the debtor is sentenced to jail, the sentence does not eliminate the debt they owe. It also does not eliminate the need to participate in discovery. Indeed, sentencing the debtor to jail is intended to encourage them to cooperate moving forward.

In 2022, creditors and their collection agencies have access to quite a few tools for collecting outstanding judgments. They can garnish wages and bank accounts. They can file property liens. They can even seize and sell some assets. The one tool they no longer have at their disposal is debtor’s prison. If you are a judgment debtor, be thankful that this is the case.

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