Can I really be put in jail for not paying my debts?
There was a recent article in the Minneapolis Star Tribune regarding Minnesotans who were literally put in jail over unpaid debts. While this is a possibility, it is a very rare occurrence. Here a list of chronological events, all of which must take place under the law, before a debtor can be put in jail:
- There must be an unpaid consumer debt, i.e. a credit card, medical bill, car loan, personal loan, etc.
- The creditor must hire a law firm licensed to collect debts in Minnesota. (The “biggies” are Messerli & Kramer, Gurstel Chargo, P.A., and Rausch, Sturm, Israel, Enerson & Hornick.)
- You or someone living or staying in your home “of suitable age and discretion” must be personally handed a Summons and Complaint, a.k.a. a lawsuit.
- You must go 20 days without answering this complaint. It is extremely important to note that this answer MUST be in writing and sent to the attorneys who have signed the lawsuit. Just calling them to discuss the debt referred to in the lawsuit is not an answer under the law. It will not stop a judgment from being entered against you.
- You should receive a notice from the court in the county in which you live indicating a judgment has been entered. This is a default judgment which is automatically entered by the court if the creditor’s attorney attests to the fact that you have not answered in writing. The laws in Minnesota do not require the creditor’s attorney to file anything proving you owe the debt, nor is any hearing required for them to get a default judgment.
- You will receive either a “Demand for Disclosure” or “Post-Judgment Discovery” both of which basically require you to tell the creditor all of your financial information such as bank account numbers, where you are employed, and whether you own a house and a vehicle.
- If you do not fill out the “Demand for Disclosure” form the creditor’s attorney will take the next step which is to ask the court for a hearing for an “Order to Show Cause”. This is something that a judge signs off on and once the judge has done so, you MUST be personally served (see above 3rd step) with that Order to Show Cause which will contain a hearing date. (Go to this hearing! Usually, you are given another chance to fill out the form described in the 6th step. If you fill it out, the hearing may be called off. If it is not, you will have a chance to stand before the judge and explain why you didn’t fill out the form sooner. Most judges will not throw you in jail for this. They will simply order that you fill the form out.)
- If you do not go to the hearing on the Order to Show Cause, this is point at which a judge can issue a warrant for your arrest for being in contempt of court. This is how people ended up in jail for an unpaid consumer debt.
I am not asserting that all of these steps were necessarily properly followed in every case, but I am simply meaning to illustrate that assuming all of the proper procedures are followed (which in a majority of cases, they are), it takes quite a bit of procrastination and indifference to get to the point of being put in jail. It is not something that should be at the forefront of your mind if you are concerned about your debt problems. In most cases, it does not get to this point, so don’t lose sleep over ending up in jail. It just doesn’t happen very often.
There is hope and light at the end of this tunnel! Call Lamey Law Firm P.A. at (651) 309-8180 for your free consultation if you are considering bankruptcy.
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