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Thread: Debtor's Prison

  1. #1

    Default Debtor's Prison

    Insanity. That will make you think twice about filling out that credit application. It's cheap cars and rented apartments, or mobile homes for me from now on. If I can't pay cash as I go, I don't need it.

    Let the bankers stick that in their "recovery" and smoke it.

    http://online.wsj.com/article/SB1000...811636610.html

    Welcome to Debtors' Prison, 2011 Edition



    By JESSICA SILVER-GREENBERG

    Some lawmakers, judges and regulators are trying to rein in the U.S. debt-collection industry's use of arrest warrants to recoup money owed by borrowers who are behind on credit-card payments, auto loans and other bills.

    More than a third of all U.S. states allow borrowers who can't or won't pay to be jailed. Judges have signed off on more than 5,000 such warrants since the start of 2010 in nine counties with a total population of 13.6 million people, according to a tally by The Wall Street Journal of filings in those counties. Nationwide figures aren't known because many courts don't keep track of warrants by alleged offense. In interviews, 20 judges across the nation said the number of borrowers threatened with arrest in their courtrooms has surged since the financial crisis began.

    The backlash is a reaction to sloppy, incomplete or even false documentation that can result in borrowers having no idea before being locked up that they were sued to collect an outstanding debt. The debt-collection industry says such errors are extremely rare, adding that warrants usually are sought only after all other efforts to persuade borrowers to pay have failed.

    Earlier this month, Washington state's House of Representatives passed by a 98-0 vote a bill that would require companies to provide proof a borrower has been notified about lawsuits against them before a judge could issue an arrest warrant. All 42 Republicans voted for the legislation, which is expected to pass the state's Senate and be signed into law by the governor. A trade group representing debt collectors supports the bill and says the changes are needed because some companies are abusing Washington's existing law by improperly arresting borrowers.

    In Florida, training this week for dozens of new judges and sitting judges who are moving to courts with the power to lock up borrowers includes a session about potential abuses of debt-related warrants. "Before we take away a person's freedom, we want to ensure that there are procedural safeguards," said Peter Evans, a Palm Beach County, Fla., state-court judge who proposed the session.

    Some judges elsewhere are issuing fewer debt-related arrest warrants because law-enforcement officials complained those cases gobble up resources needed to pursue violent offenders.

    Illinois regulators are investigating the use of warrants by debt collectors and other financial firms doing business in that state. In September, the Illinois Department of Financial and Professional Regulation issued an order seeking to revoke the license of Easy Money Express Inc. The Paducah, Ky., payday lender won arrest warrants against at least four customers. One spent five days in a Carbondale, Ill., jail last March after failing to pay a $275 debt, court filings show. The lender "exploited the court system to obtain the arrest and incarceration of its customers," said Sue Hofer, a spokeswoman for the agency. The company declined to comment but is fighting the state's proposed ban.

    At the national level, the Federal Trade Commission began scrutinizing in July the use of arrest warrants in debt-collection lawsuits. An FTC spokesman declined to comment on whether the inquiry has led to formal investigations by the agency, which oversees the debt-collection industry and enforces a U.S. law that restricts how borrowers can be pursued for debts.

    Arrest warrants generally can be issued if a borrower defies a court order to repay a debt or doesn't show up in court. Retailers, credit-card issuers, landlords and debt collectors are the most frequent seekers of such orders, according to court filings and interviews with judges and lawyers.

    Encore Capital Group Inc., the largest publicly traded debt-buying firm by revenue, last year began requiring law firms handling its cases to follow a "code of conduct" that includes this sentence: "Under no circumstances should a firm cause a consumer to be taken into custody involuntarily."

    J. Brandon Black, Encore's president and chief executive, said the San Diego company decided to stop threatening borrowers with jail because the practice made Encore look bad. The company filed 425,000 lawsuits against borrowers last year, up 27% from 334,000 in 2009.

    Last year, officials in McIntosh County, Okla., south of Tulsa, issued about 1,500 debt-related arrest warrants, up from about 800 a year before the crisis, according to a court clerk. More than 950 borrowers got similar warrants in Salt Lake City courts last year. Maricopa County, Ariz., officials issued 260 debt-related warrants in 2010.

    Few orders result in jail time. For example, in Piatt County, Ill., just five borrowers were arrested last year out of the 13 hit with debt-related arrest warrants. The sheriff said he puts a higher priority on tracking down people accused of violent crimes.

    "I wish I could do it more," said Piatt County Circuit Judge Chris Freese, who has heard hundreds of debt-collection cases. "It's often the only remedy to get people into court and paying their debts."

    In one of those cases, Emmie Nichols, 26 years old, was arrested in June at her mother's house after lawyers for Capital One Financial Corp. won an arrest warrant against her for skipping a court hearing about $1,159.87 she owed on a credit card from the company. The $500 bond that freed Ms. Nichols from the county jail was turned over to Capital One as a partial payment of the debt, court filings show. A Capital One spokeswoman declined to comment on Ms. Nichols. Some judges are worried that the jump in debt-related arrest warrants is creating a modern-day version of debtors' prison. The practice ended in 1833 after decades of controversy, since borrowers owing as little as 60 cents could be held indefinitely in squalid jails until they paid off their debt.

    Earlier this year, Vanderburgh County, Ind., Superior Court Judge Robert Pigman asked Indiana's highest court to review the legality of debt-related warrants after law-enforcement officials complained they can't quickly access arrest orders for dangerous criminals because their computer system is clogged with debt cases. The Indiana Supreme Court hasn't responded to the request.

    In September 2009, Jeffrey Stearns, a concrete-company owner, answered a knock at the door from a Hancock County, Ind., deputy sheriff. The deputy was holding a warrant to arrest Mr. Stearns for not paying $4,024.88 owed to a unit of American International Group Inc. on a loan for his pickup truck.

    After being handcuffed in front of his four children, Mr. Stearns, 29 years old, spent two nights in jail, where he said he was strip-searched and sprayed for lice. Court records show he was released after agreeing to pay $1,500 to the loan company. "I didn't even know I was being sued," he said, though he doesn't dispute owing the money. "It's the scariest thing that ever happened to me."

    Mr. Stearns said he never got the summons or two orders to show up before a judge that a deputy sheriff said in court filings were delivered to him. Hancock County Sheriff Mark Shepherd couldn't be reached for comment. Mark Herr, an AIG spokesman, declined to comment on Mr. Stearns but said the lending unit was sold in November.
    "The best we can hope for concerning the people at large is that they be properly armed."
    -- Alexander Hamilton, The Federalist Papers at 184-188

  2. #2
    Patron JKClay's Avatar
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    Default Re: Debtor's Prison

    This is just one of the many reasons I avoid debt at all costs! The only thing I owe on is my house and my Jeep and I wish to God I wouldn't have taken a loan on my Jeep. This country is so out of control in debt. When I graduated college I was $20k in cc debt and decided to live way below my means and pay it off. It sucked for a while (a long while)...I wasn't able to buy a house or drive a nice car. I got out of debt started saving and now I have a 130k home on a 15 year note (only 10 more years or less left) and a 09 Jeep Wrangler that I only have 3 more years to pay on! I will have my house paid off before my 44th b-day (or sooner)! If I would've kept going down the credit card road I would have had to file bankruptcy by now...I hate credit card companies and all that goes with them!

  3. #3

    Default Re: Debtor's Prison

    Its not rocket science.
    If you don't have the money to pay for it. Don't buy it.
    I'm not biased

    Quote Originally Posted by JB Books View Post
    DennisShoddy is the 12th Imam
    Common sense is not a Gift....
    Its a punishment, because you have to deal with everyone who doesn't have it.

    "The strongest reason for the people to retain the right to keep and bear arms is, as a last resort,
    to protect themselves against tyranny in government."

  4. #4
    Patron RETOKSQUID's Avatar
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    Default Re: Debtor's Prison

    In 1833 the United States abolished Federal imprisonment for unpaid debts, and Oklahoma prohibits it under our state constitution. Can see many more people saying F this and declare bankruptcy if crap like this is allowed to continue. But dennishoddy is right on the money!
    You say filthy Squid like it's a bad thing!



    A warrior is non judgmental, we do not judge others, for judgement is the providence
    of GOD alone. We however, are charged with arranging the meeting.

    Politics in a nut shell. Elephants and Asses Screwing the Masses!

    Quote Originally Posted by BadgeBunny View Post
    My take on all this is that God has a righteous sense of humor and said "Hey!! St. Pete ... that guy's playing with those friggin' snakes again ... Hold my wineglass and watch this!"

  5. #5
    Patron Glocktogo's Avatar
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    Default Re: Debtor's Prison

    My wife and I live within our means, which is WAY below what we could borrow "according to the experts". Well the "experts" can go **** themselves! What they want is people hooked on credit like crack babies. They've pretty much had their way with this country and it shows. Hope they get theirs in the end!
    J.B.


    What if this whole crusade's a charade?
    And behind it all there's a price to be paid
    For the blood which we dine
    Justified in the name of the holy and the divine…

    Nothing is foolproof to a sufficiently talented fool.

    Glocktogo's Feedback

  6. #6

    Default Re: Debtor's Prison

    Quote Originally Posted by Glocktogo View Post
    My wife and I live within our means, which is WAY below what we could borrow "according to the experts". Well the "experts" can go **** themselves! What they want is people hooked on credit like crack babies. They've pretty much had their way with this country and it shows. Hope they get theirs in the end!
    Our house is paid off now, but if we had
    "invested" in a house at the level the bank said we could afford, we would be eating beans and rice for supper.
    I can't believe that people can't look at their monthly income, factor in the monthly bills, and then figure out what they can pay for a house payment......
    ITS NOT ROCKET SCIENCE!
    I'm not biased

    Quote Originally Posted by JB Books View Post
    DennisShoddy is the 12th Imam
    Common sense is not a Gift....
    Its a punishment, because you have to deal with everyone who doesn't have it.

    "The strongest reason for the people to retain the right to keep and bear arms is, as a last resort,
    to protect themselves against tyranny in government."

  7. #7

    Default Re: Debtor's Prison

    Quote Originally Posted by Glocktogo View Post
    My wife and I live within our means, which is WAY below what we could borrow "according to the experts". Well the "experts" can go **** themselves! What they want is people hooked on credit like crack babies. They've pretty much had their way with this country and it shows. Hope they get theirs in the end!
    I could not agree more. All I want is enough land to have something large enough to at least jokingly call my ranch, a few head of cattle and a couple of horses but according to the experts I could buy the world. Well screw them all; in two months I pay off a car, child support of 19 years “not that I regret that part”, etc. etc. etc. I think all I want from here is a new set of tires and shocks for my Jeep. A year from now, I owe nothing. I had to learn it all the hard way but boy did I learn it!
    "If you think it's expensive to hire a professional to do the job, wait until you hire an amateur." - Red Adair

  8. #8
    Patron Glocktogo's Avatar
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    Default Re: Debtor's Prison

    Quote Originally Posted by dennishoddy View Post
    Our house is paid off now, but if we had
    "invested" in a house at the level the bank said we could afford, we would be eating beans and rice for supper.
    I can't believe that people can't look at their monthly income, factor in the monthly bills, and then figure out what they can pay for a house payment......
    ITS NOT ROCKET SCIENCE!
    Another trap is buying on credit without a large enough down payment. I will only have a house payment and one car payment at a time. I could sell either one for a net loss tomorrow and still get cash back. If you're upside down on anything, you're vulnerable.
    J.B.


    What if this whole crusade's a charade?
    And behind it all there's a price to be paid
    For the blood which we dine
    Justified in the name of the holy and the divine…

    Nothing is foolproof to a sufficiently talented fool.

    Glocktogo's Feedback

  9. #9

    Default Re: Debtor's Prison

    Quote Originally Posted by RETOKSQUID View Post
    In 1833 the United States abolished Federal imprisonment for unpaid debts, and Oklahoma prohibits it under our state constitution. Can see many more people saying F this and declare bankruptcy if crap like this is allowed to continue. But dennishoddy is right on the money!
    According to the article, McIntosh County, OK is one of the places where it's happening.
    "The best we can hope for concerning the people at large is that they be properly armed."
    -- Alexander Hamilton, The Federalist Papers at 184-188

  10. #10

    Default Re: Debtor's Prison

    Quote Originally Posted by dennishoddy View Post
    Our house is paid off now, but if we had
    "invested" in a house at the level the bank said we could afford, we would be eating beans and rice for supper.
    I can't believe that people can't look at their monthly income, factor in the monthly bills, and then figure out what they can pay for a house payment......
    ITS NOT ROCKET SCIENCE!
    The problem is that shoddy lending practices drove prices up to the point where many couldn't afford the loans they got. And the housing bubble drove rental prices right up with them.
    "The best we can hope for concerning the people at large is that they be properly armed."
    -- Alexander Hamilton, The Federalist Papers at 184-188

  11. #11

    Default Re: Debtor's Prison

    The only time I ever take on consumer debt is when the cost is 2% or less. If that rate has a time limit, I pay the debt off before the rate expires. For the most part, consumer debt is very bad.

    The only debt I carry is on my real estate. My rentals will all be paid off in less than 10 years. I never finance property for more than 15 years and always aim for paying it off sooner.

    Too many people are trying to finance happiness.

    I'm lucky that I have good paying business that has done well, and I also consider myself lucky to have grown up with my grandparents, who grew up during the Great Depression. It made a compulsive saver out of me. Finally, I am damn lucky I have a great wife who is down to earth. I know some lawyers whose wives are so caught up in putting on the dog that they have a negative net worth. We don't want "friends" you have to impress. If some one is going to be my friend based on my job or what I own, that is someone I want to stay a long ways away from. Money is a nice tool that makes life easier, but it sure the hell is not the measure of a person's character.

  12. #12
    Patron AKguy1985's Avatar
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    Default Re: Debtor's Prison

    thats messed up. If you have a loan with empire finance and you get behind they will threaten to have the court issue a bench warrant for your arrest. They can go screw themselves.

  13. #13

    Default Re: Debtor's Prison

    Quote Originally Posted by RETOKSQUID View Post
    In 1833 the United States abolished Federal imprisonment for unpaid debts, and Oklahoma prohibits it under our state constitution. Can see many more people saying F this and declare bankruptcy if crap like this is allowed to continue. But dennishoddy is right on the money!
    Legislatures here and in other states have circumvented the laws to please their true masters, the money industry. But why if the poor are to be jailed for debt are lawmakers who keep indebting our nation foolishly and greedily, will we be held accountable for the debts they incurred on our behalf when many did not agree to such? What about the mortgage fraud committed by banks, (often aided by lawyers and the courts) will they be held accountable for their actions and offenses against the law, people and country? Probably not because as we've seen "laws are for the little people", and the true power in this country is not the law or the people, it's the money they're bought with.

    http://www.startribune.com/local/95692619.html

    It has been said that politics is the second oldest profession. I have learned that it bears a striking resemblance to the first.
    -Ronald Reagan

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