States Where You Can Go to Jail for Debt

Lenders and debt collectors often threaten borrowers with jail. As it turns out, you can’t get arrested for not paying a loan or credit card debt – but there are loopholes that collectors in many states can use to get you jailed. Moreover, there are other types of debt that can lead to a prison sentence in any state of the US.

Debts and States that Have Debtors Prison

While you cannot be arrested simply for not paying consumer debt like a loan (see below), there are several types of debt that can indeed land you in prison. According to a study by the Brennan Center for Justice, there are at least fifteen states where debtors are regularly jailed for the following reasons:

1. Criminal justice debt.
   List of States: Alabama, Colorado, Georgia, Michigan
   
2. Child support. Judges normally rule to incarcerate a parent only after other methods have failed, such as garnering the parent’s wages. The prison term usually does not exceed six months, so as not to preclude the incarcerated parent from paying child support in the future. 
   List of States: Alabama, Colorado, Florida, Indiana, Maryland, Michigan, Missouri, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Washington.
   
3. “Choosing jail“. There are programs when a debtor chooses a jail instead of court-ordered debt.
   List of States: California, Missouri.

Other reasons that can lead to jail:

• Unpaid federal taxes. Note that you can’t go to jail just because you are unable to pay what you owe to the Federal government. You have to commit a tax-related crime, such as willfully failing to file a tax return, filing a fraudulent return, or tax evasion. 
• Court fees and fines. In Bearden v. Georgia, 461 U.S. 660 (1983), the US Supreme Court ruled that it’s unconstitutional to imprison someone who is not able to pay a fine or court fees. However, debtors who can pay but deliberately don’t can be jailed. In practice, many people without money and without a job still end up in jail for unpaid fines. 

Which Types of Debt Cannot Land You in Jail

Among all the scare tactics used by collection agencies, one of the most common is to threaten borrowers with arrest or jail unless they pay off the debt. This happens very often in payday lending, and it can make one feel really anxious and scared. But is it really possible to put someone in prison just because they haven’t paid off a payday loan, for example?

Here is a non-exhaustive list of the types of debt that in themselves cannot lead to arrest or prison term: 

• payday loans;
• credit card debt;
• car loans;
• student loans;
• mortgage;
• unpaid rent;
• hospital bills;
• unpaid utility bills;
• account overdraft.

All these types of obligations are collectively referred to as ‘consumer debt’, meaning that it is incurred as a result of purchasing consumer goods and services: accommodation, education, medical care, food, a car, and so forth.

Collection agencies are banned from threatening borrowers with arrest or jail for consumer debt. This ban is contained in the Fair Debt Collection Practices Act (FDCPA). If you have unpaid loans or bills and you get a threat like that from a collector, you can even sue them. 

The Two Strategies Used by Creditors to Get Borrowers Arrested

While you can’t be imprisoned simply for owing money, there are loopholes that collectors can use to get you arrested and jailed. 

Strategy 1: Not Complying with a Court Order

Creditors can’t threaten you, but they can sue you. In this case, you’ll receive a court summons (read our article on the payday loan court summons for more details). It’s not an order, but if you ignore it, the judge will either rule against you and order you to pay or order you to appear in court. If you ignore this order, you can be jailed – not for the debt itself, but for being in contempt of the court. 

According to a report by the American Civil Liberties Union, there are 26 states in which a judge can order an arrest and jail time for holding the court in contempt: 

Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana,  Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Washington, Wisconsin.

There are also six states where you cannot be jailed for being in contempt of court:

Alabama, New Mexico, North Dakota, South Dakota, West Virginia, and Wyoming.

Strategy 2: a Debtor’s Examination

A debtor’s examination is a special court procedure that can take place only after the judge has ruled against you. At the examination, you must answer the creditor’s questions about your finances under oath. The purpose is for the creditor to understand what is the best way to make you pay. 

The lender or collection agency can use the examination as a loophole to get the judge to find you in contempt of court and to get you locked up. This can happen if you:

1. don’t appear at the examination. Note that in some states, such as California, you must be served notice in person ten days before the exam, to avoid that you miss the notice by accident;
2. refuse to answer the questions (you don’t have the right to remain silent at a debtor’s examination);
3. deliberately provide false answers.

If you can’t make it to the exam for some reason, call the creditor’s attorney in advance and ask for a rescheduling. If they refuse, file a written motion with the court. 

NOLO notes that the states where it’s particularly common for debt collectors to try and get you arrested using these two techniques are Illinois, Minnesota, Missouri, Ohio, and Pennsylvania. Sometimes lenders even request an examination multiple times, hoping that you will fail to appear at least at one of them.  Once arrested, you’ll be released only after you post a bond, which is usually equal to the amount you owe to the creditor. 

The Three Types of Debt That Can You Go to Jail for

As we’ve seen, you cannot be arrested simply for not paying consumer debt, but there are several types of debt that can indeed land you in prison. They are known as a priority debt and include the following:

1. Unpaid federal taxes. Note that you can’t go to jail just because you are unable to pay what you owe to the state. You have to commit a tax-related crime, such as willfully failing to file a tax return, filing a fraudulent return, or tax evasion. 

2. Child support. Judges normally rule to incarcerate a parent only after other methods have failed, such as garnering the parent’s wages. The prison term usually does not exceed six months, so as not to preclude the incarcerated parent from paying child support in the future. 

3. Court fees and fines. In Bearden v. Georgia, 461 U.S. 660 (1983), the US Supreme Court ruled that it’s unconstitutional to imprison someone who is not able to pay a fine or court fees. However, debtors who can pay but deliberately don’t can be jailed. In practice, many people without money and without a job still end up in jail for unpaid fines. 

The 5 Rules to Follow to Avoid Going to Jail for Debt

Here are five simple rules you should follow to avoid getting locked up for consumer debt:

1. Respond to the court summons: this is your chance to mount an initial defense and even turn the proceedings against the creditor;
2. If you are being harassed or threatened by collectors, report them to the Consumer Financial Protection Bureau;
3. Never ignore an order to appear in court;
4. If you are called to appear at a debtor’s examination, make sure to do so – and answer all questions truthfully;
5. Know your rights and try to get free or low-cost legal advice first. In many cases, collectors are not even authorized to sue you, but you will not know that unless you ask an attorney.

Though it’s rare for people to go to jail for not paying off a loan, borrowing can be risky in many other ways. You’ll find more information on how to protect yourself from predatory lenders and how to choose a cheaper loan in our blog.