Can You Go to Jail for Debt?

If you’re one of the many people who struggle with financial problems, you might have asked yourself “Can you go to jail for debt?”

Debt collectors cannot arrest you for credit card or other consumer debt, but they can take you to court and sue you for payment. And, under certain circumstances, debt can lead you to jail for fraud, theft, or defying a court order.

This is just one reason that if you find yourself with debts you cannot meet, your best bet is to seek legal advice. The skilled and seasoned Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand that money problems can happen to even the most well-intentioned people.  We offer a free consultation to evaluate your financial situation and help you get out of debt. 

Will Debt Make You Go to Jail?

Can you go to jail for debt? According to the federal Fair Debt Collection Practices Act, debt collectors collecting debts for others are prohibited from engaging in abusive or harassing conduct, and that includes threats of sending you to jail. However, if you do not pay your debts, your creditors can sue you in court.

In Ohio, you have 28 days to answer or respond to a court complaint against you by creditors. Even if you disagree with the amount of money claimed or you do not believe you owe the money, you should respond by filing an answer.  If you don’t file an answer, if you overlook a legal summons and complaint, or if you don’t show up in court when you are supposed to, the creditor can win the case by default and receive a judgment against you.

The court can then take steps to make you pay. Courts can order the garnishment of your wages or attachment of your bank account and allow creditors to seize some of your personal property and put a lien on your real estate.  If the judgment is large enough and you have equity in your home, you might be forced to sell your property. Ohio law, does give you an exemption for a certain value of your residence, but anything over that can be used to satisfy creditors.  There is also an exemption for medical debts, and limits for personal property and for a vehicle. See the Ohio Revised Code 2329.66 for a list of exemptions.

If creditors still can’t get money from you, the courts can order you to appear in court for a debtor’s examination.  Then, under oath, you have to answer questions about your finances and why you haven’t paid that creditor.

If you do not attend the debtor’s examination, the court can find you in civil contempt for disobeying its order to appear. If you do not pay or follow the court’s orders, that’s when jail becomes a possibility.

So, will debt make you go to jail? Not exactly. What lands people in jail is not owing the money — it’s the fact that they ignored or failed to follow an order issued by a court or to show up for a hearing.  If you are found to be in contempt of court, the court can issue a warrant for your arrest. If arrested, you can be sent to jail until you post a bond which equals the amount of the judgment.  In addition, in 40 of the 75 counties in Ohio, you can be assessed a booking fee, a daily fee, or both, of up to $66.09 each day you are in jail.

Additional Reading:  Means Test For Bankruptcy If You’re Self-Employed

Can You Go to Jail for Debt, and What You Can Do to Avoid Jail

So, now that we’ve cleared up whether jail is a possibility for debtors, let’s talk about how someone in debt can avoid ending up in jail. Here are a few steps you can take to protect yourself in the event of debt you can’t pay:

  1. Always read and respond to all papers you get from the court or the attorney of a collector who is suing you. These papers have important information, and not responding could mean you are found in contempt of court.
  2. Go to the hearings.
  3. Know whether you are judgment-proof.
     This means your income is exempt from garnishment and you do not have assets that can be seized and sold to pay your debt. If you have no assets or have only assets which are exempt, you may be judgment-proof and a suit will have little or no effect on your present financial circumstances.Ohio law exempts some sources of income from seizure by creditors. These include social security retirement or disability benefits, SSI, OWF and other public benefits, worker’s compensation and unemployment compensation.
  4. Ask for a hearing. You have the right to a hearing if you disagree with an order of garnishment if the money in your account comes from an exempt source. If your source of income is exempt, the money stays exempt, even if directly deposited in your bank account. However, the bank will freeze whatever is over the exemption amount.
  5. File for bankruptcy. If you have found yourself in a situation where the debt is more than you can handle, here’s some good news — there is help available to get you past this crisis and provide the fresh start you need.  Bankruptcy, a legal way to have many debts forgiven, can put you on the road to financial recovery.  If you’re a good candidate for bankruptcy, filing can keep creditors from harassing you and seizing your possessions, allow debts to be forgiven, and provide a way for you to keep your assets and begin to rebuild your life.

Discuss your Debt Relief in a Free Consultation

Many people struggle with this question: Can you go to jail for unpaid debts? You cannot be arrested for debt, but creditors can file a lawsuit against you and even garnish your wages for payment.  Jail is only a factor in cases of fraud, theft, or defying a court order.  Take the first step toward debt relief and contact the experienced and compassionate attorneys at Fesenmyer Cousino Weinzimmer today for a free initial consultation.  We will evaluate your entire financial situation by looking at your income, your debts and your goals, and we will discuss the best fit for your financial situation.  We will handle every phase of the process, including getting creditors to stop attempting to collect on unpaid bills. We’ll provide you a free consultation so we can determine what debt relief solutions will work best for you.

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