There are so many people that are struggling with overwhelming debt. Many of those who find themselves in an impossible situation financially attempt to “do what they can” to stay in good standing. Doing what they can usually means sending in as much money as possible, but not meeting the minimum monthly payment as required by the credit card agreement. In this situation, consumers often begin to worry excessively about the potential consequences. At worst, they fear arrest and jail time.
While this fear isn’t entirely unwarranted, it’s very unlikely in most cases. When an account holder fails to make the minimum monthly payment on their account, the creditor will assess late charges. Making “some” payment may keep your account in semi-good standing for a few months, but at that point, the creditor (or more likely the creditor’s computer system) will notice the consistent underpayment towards the account’s balance and the account will be sent to the collection department.
Depending upon the general rules adhered to at the particular creditor/company, the account will eventually be “charged off.” When the account hits this stage, there are 3 different potential consequences. First, the creditor could sue you. Second, the creditor could assign the account balance to a 3rd party collection agency (who would then proceed to attempt to collect the amount due). Third, the creditor could charge off the account and an independent collection agency could try to collect.
Creditors (or collection agencies who pick up charged off debt) don’t sue on every single account that falls into collections and is charged off, but it’s a possibility. You won’t be arrested for being sued. But during the process of the lawsuit you could be ordered by the judge to appear in court. If this happens, be there. He will simply want to hear an explanation regarding why you are not paying on the debt you accrued. This request to appear in court could have various names in different parts of the country, but it will be something along the lines of: an Order to Appear for a Debtor Examination. If you fail to appear when such an order requires you to do so, you could be arrested for failing to respond to the court order. If you were to disregard the notice and simply not show up to the court date, the judge could issue a bench warrant for your arrest in response to your failure to appear at the hearing. It’s possible that the local sheriff department could come to your place of residence and arrest you after the warrant is issued.
I’ve worked with a lot of individuals who turned to bankruptcy in response to insurmountable debt. Of those, a large percentage had been sued for non-payment. In all my time as a bankruptcy lawyer and out of all my clients who have been in this situation, I’ve only heard of an arrest once. It depends on how aggressive the sherriff’s department is in the county of residence. It would be much more likely that the trouble would occur after a routine traffic violation resulted in being stopped by a police officer. Any outstanding warrants (including a bench warrant issued by a judge) would show up in their computers when they were running your identification.
Hopefully, having this additional knowledge will put your mind at ease regarding the “slim to none” chances of your non-payment resulting in an arrest. Being sued is a serious business, but there’s very little chance that you would ever spend any time in jail over this type of financial trouble. It’s much more likely that you would end up having your wages garnished or your bank account levied. Creditors looking for money don’t want you to end up in prison. It’s close to impossible to hold down a job providing you with a good living when that happens and all they care about is where you’re going to get that next payment! If you’re in prison, the chances that they will get paid decrease significantly!
For more information on credit card debt or obtaining a discharge of credit card debt through bankruptcy, call the Southern California bankruptcy attorneys at Westgate Law.