Editor: The following was forwarded by a reader
NEW DEAL 2.0: This week’s credit check: Judges have signed off on more than 5,000 warrants allowing borrowers who don’t pay to be jailed since the start of 2010. Portfolio Recovery Associates, a debt buyer, made $44 million last year on $281 million in revenue, a 16% net margin.
You wouldn’t be crazy to think that debtor’s prisons are a thing of the past. Debtors have historically been treated pretty poorly: under Roman law, a debtor’s body could be chopped up and the pieces given to his creditors (although they were more likely to be turned into slaves). So debtor’s prisons, in comparison, might seem less harsh. But they were squalid and debtors weren’t given any provisions. No sentences were set; you were there until you paid up. Borrowers owing as little as 60 cents could be jailed indefinitely. They were officially abolished in the United States in 1883.
But they’re now making a comeback in a modern form. As the debt-collection industry buys up bad debt and then seeks payment, it’s started relying on arrest warrants to get its way, throwing those who miss court appearances or don’t pay in jail. The Minneapolis StarTribune was one of the first to report on the resurgence: after analyzing court data it found “the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009.” The practice is inconsistent, varying state-by-state, and the actual punishment varies. But there have been some cases that stand out:
In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January, a judge sentenced a Kenney, Ill., man “to indefinite incarceration” until he came up with $300 toward a lumber yard debt… (more)
Law abiding, hard working Americans have lost almost everything in this current economy. Must they lose their dignity as well? These are people who believe in paying their own way, who have worked hard and worked within the system to fulfill not only their dreams, but their responsibilities as well.
Now the economic system has failed and these people are faced with heart breaking choices. Do I pay for food and shelter or pay credit card debt? People must meet their most basic needs of food and shelter before they can accomplish ANYTHING else.
A petition has been started on moveon.org to prevent the return of debtor’s prison in the USA. Once enough signatures are obtained, it will go to the US Congress and President Obama.
To sign the petition go to
http://signon.org/sign/outlaw-the-return-of