Is my brother going to jaiil?

My brother is somewhat of an underachiever (read: bum). He’s, at best, underemployed, and often unemployed. A couple years ago he ran up something like $15,000 on a credit card, then just stopped making payments. He’s always getting mail and phone messages from collection agencies, etc., all of which he completely ignores. Now he says he’s getting phone calls referring to handing the case over to the county sherrif. To me this sounds like it’s really getting serious (as it should).

My question is: if this case is turned over to the sherrif, and my brother is still ignoring the situation, what can they do to him? He doesn’t own anything of value that they can take away. I assume they would, at least, garnish whatever his wages are (I can’t believe they haven’t done this yet). So can he wind up in jail? Can they come knocking on his door one day and carry him away?

Whatever happens, I’m resolved not to help him out, as I’ve done in the past. He really needs to take responsibility for his life. But I’d still like to know what he’s up against.

At the point where it is handed over to a sheriff, it’s no longer an issue of wage garnishment or material reposession, it’s a legal matter concerning jail time. Much like a mortgage forclosure, he’ll be given notice that he has a very limited time to comply with a payment schedule or he will be given jail time. This same thing happened to a buddy of mine with a substance abuse problem.

Probably the sherriff would serve him with a summons to appear in civil court. If the cc company wins a judgment against him, they can garnish his wages if he doesn’t pay them.

Haj

panache45, you sound like you’re talking about my brother, except mine perpetrated credit fraud with my information to run up his debts. Thank God that’s cleared up, but I still get nasty calls looking for him.

That said, Ryan Mahoney, I was under the impression that we didn’t imprison debtors in this country (assuming the USA) any more, other than for frauds relating to the debt.

Outlawing debtor’s prisons was one of the first acts of the Congress. I don’t understand what purpose there would be in turning a debt over to the sheriff in the United States unless a mortgage was involved. In England, personalty of the debtor can be seized to cover the debt, but that practice was abolished in the United States.

IANAL but jail? WTF?

No, darlin.

His credit’s ruined, at least for 7 years or so. They can garnish his wages. They can sieze any tax refunds he’s entitled to.

If he has no assets, they’re pretty much up a creek. You can’t get blood out of a turnip. The credit card company will have to eat it.

Bad debtors is one of the reasons that credit card companies charge interest through the roof. They write off millions in uncollectable debts every year.

Hopefully your bro has learned his lesson and will never do it again.

The only way I could see the CRIMINAL sheriff getting involved:

  1. cc company sues, gets a judgement

  2. pursuant to the suit, bro agrees to a COURT-ORDERED payment plan (IANAL, but this doesn’t sound too likely - the courts probably don’t want ot get into the business of overseeing cc payments).

  3. bro abrogates the agreement

  • MAYBE - JUST MAYBE this could turn into a contempt of court case.

For the CIVIL sheriff to be involved:

  1. cc company sues, gets judgement

  2. bro does not pay judgement

  3. cc company goes back to court, gets writ to seize personal property - the sheriff would be the one seizing the goods

KellyM - are you saying debtor prisons still exist in the UK?

make charges with no intent to ever pay the bill is a crime, but I’ve never heard of anyone going to jail because it’s hard to prove your intent.

Debt collectors lie all the time. They will say anything if they think it will get you to pay up.

Your brother should see a lawyer and file bankruptcy.

Extraneous, no, I’m not. As far as I know the UK has also abolished them. However, the UK does still allow for the seizure of personalty to satisfy a debt. United States law does not, except through the bankruptcy process, which is loaded with exemptions and protections for the debtor.

It is, however, possible to seize personalty when it has been made subject to a lien as a term of the credit offering. Store credit cards, but not general credit cards like Mastercard or Visa, generally assert a lien on property purchased with the card. Generally, such liens are only exercised in insolvency on furniture, major appliances, and (of course) vehicles.

There is no distinction between the “civil sheriff” and the “criminal sheriff.” They are the same office.

Unless we’re talking about child support, for which the faliure to pay can involve jail time, monetary restitution for a criminal act, for which parole or probation was conditional, I can’t think of a way that jail could be involved.

The sheriff could well be responsible for serving summonses, writs of garnishment or seizure, such as fieri facias, which permits him seize and sell certain items of the property of the debtor to satisfy a creditor’s judgment.

  • Rick

If a collection agency threatens you with something that it cannot possibly do, that is in fact a violation of the Fair Debt Collection Practices Act. The judge is authorized to award any amount up to $1,000 dollars to your brother if he brings his debt collector to court for this violation. In addition, if monetary damages from this threat exceed $1,000, the judge is authorized to render even higher judgements against the collection agency.
Suggest that your brother sue in small claims. If he gets a $1,000 judgement against the collection agency, then he’ll be in a much smaller debt hole than he is in now… better to owe 14,000 than 15,000.
www.creditnet.com 's discussion forums abound with people who have successfully sued collection agencies.

Credit cards are generally unsecured debts. They basically gave you the money on your word. If you don’t pay, there is not much they can do. There is actually a statute of limitations on the time to pay the debt in most states. I think it’s 4 years in North Carolina.

It is possible in the States for someone to be put in jail for failure to pay a debt, but not for being unable to pay – only for refusing to turn over funds or property that he has, and only after a legal judgment has been properly rendered against him and a separate lawsuit to execute that judgment has also been filed.

I agree that your brother should contact a bankruptcy attorney immediately – while collection agencies might give up on pursuing a few hundred bucks if it’s too much hassle, that’s unlikely with several thousand dollars in the kitty. Just ignoring the problem is never going to make it go away.

–Cliffy

Fascinating idea, Jonathan.

Except that, from the OP:

As was explained above, the collection agency can, in fact, refer the matter to the sheriff if they have secured a judgement and wish to execute a writ.

So on what basis would the brother’s suit against the collection company proceed?

So much misinformation on this thread. First off, IANAL, and don’t rely on what I have to say because for all you know, I’m a complete moron.

Here’s very likely what happened. Credit card company realized that Brother’s debt was not going to be recovered. Brother is in breach of his contract with the credit card company. Credit card company can now sue Brother on the debt, but credit card company doesn’t want to do this. It instead sells Brother’s debt (and the corresponding cause of action against Brother) to Collection Agency.

It’s profitable for Credit Card Company to sell Brother’s debt to Collection Agency because Collection Agency has expertise in persuading creditors to repay their debts extrajudicially (that is, without resort to judicial process). Collection Agency then begins dunning Brother, but Brother refuses to repay.

Since Collection Agency is not a secured creditor, there’s no collateral that Brother pledged to secure the loan initially given to him by Credit Card Company. Therefore, to collect on the debt, Collection Agency must resort to judicial process. (Really, many secured creditors have to resort to judicial process too – since secured creditors aren’t allowed to breach the peace when repossessing collateral, if they want to seize many kinds of collateral they have to go through the courts.) Collection Agency goes to the local courthouse and files a complaint: Debtor owes me money and there’s no legal reason to release him from the obligation. The court clerk issues a summons that goes to Brother, who ignores it. Brother does not answer the complaint. If he did answer and raised a material dispute, there could potentially be a trial on the issue. But since Brother does not answer the complaint, the court gives Collection Agency a default judgment, which is as effective as any other judgment so long as Collection Agency follows the proper procedures.

The judgment is then “docketed,” which means it’s recorded on a “judgment roll.” What happens next depends on the kind of property Brother owns: real estate or personal property. In most states, a judgment alone establishes a lien on a debtor’s real property. A judgment lien doesn’t usually give the creditor the right to immediate possession of the debtor’s real property; rather, it gives the creditor a right to go after the proeprty and priority over all those who later acquire liens after the lien arises. If Brother’s property is all personal property, Collection Agency has to do more than just have its judgment docketed. The docketing only gives Collection Agency the right to obtain a writ of execution from the court clerk.

The writ of execution directs the sheriff to seize and sell sufficient property of Brother to pay the judgment entered in Collection Agency’s favor. If the property isn’t readily moveable, the sheriff will take other steps to deprive the debtor of the use of the asset and to put others on notice. For example, the sheriff might padlock Brother’s warehouse of widgets – these actions constitute a “levy” on Brother’s property. If Brother’s property are bank accounts or a stream of income like wages, then Collection Agency can reach those intangible assets using a procedure called “garnishment,” which orders the bank or employer to pay Collection Agency instead of Brother. The sheriff WILL NOT arrest Brother; we don’t have debtors’ prisons these days.

The next step for real and personal property is a state-supervised sale. Any surplus resulting from the sale after the payment of expenses and the judgment under which the property was seized and sold is distributed to any junior creditors or returned to Brother.

Since Brother is an individual, however, there will be certain kinds of property that will be beyond Collection Agency’s reach. Each state has its own list of proeprty on which creditors cannot levy. For example, in Texas or Florida, general creditors (like Collection Agency) cannot reach any of the equity a debtor has in her home. Other states have such homestead exemptions but subject them to a dollar cap. Household furnishings and tools of the trade are often protected, although there are usually dollar limits, both int he aggregate and with respect to specific types of property. State exemption laws differ dramatically both in the types of property that are covered and in how generous they are.

Federal law also limits Collection Agency’s ability to reach Brother’s assets. Teh Consumer Credit Protection Act, for example, limits the extent to which any single creditor may garnish an individual’s wages. See 15 USC sect 1673(a) (garnishment of aggregate disposable earnings limited to the lesser of 25 percent or the amount by which the debtor’s disposable earnings for a week exceed thirty times the federal minimum hourly wage). In addition, certain types of federal payments (.e.g, Social Security) aren’t subject to legal process and thus are beyond the reach of creditors. See 42 USC sect 407(a).

Brother may no longer have assets sufficient to satisfy the judgment. In many cases, general creditors like Collection AGency will just be out of luck. But if the reason Brother has no assets is because he’s given them all to Sister, this transfer will be set aside through fraudulent conveyance law. The transfer to Sister is a sham, and Collection Agency can ignore the transfer and levy on the goods in Sister’s hands as if the transfer never took place.

Brother very likely doesn’t have a Fair Debt Collection Act claim. The Collection Agency probably wasn’t threatening to have Brother arrested; rather, they were probably threatening to have the sheriff come down and levy on all of Brother’s property. That’s totally fine under the FDCA. Tell Brother to reread his messages.

Of course, all of the nasty evil stuff Mr. Hand talks about is halted instantly if Brother files for bankruptcy.

What is evil and nasty about having someone pay the money that they owe?

Haj

Tell brother to give them the “finger”, wait out the seven (or whatever) years, and then start over. Free and clear.
Peace,
mangeorge

My brother happens to be a bill collector for one of those agencies that buys out debt from companies such as Visa and MasterCard. The CC company figures it’s a dead issue, so they sell the debt to a collection agency for pennies on the dollar, usually no more than .10 to the dollar owed. (At least in my brother’s company) I guess the CC company figures getting paid some is better than getting paid nothing at all. This also gives the bill collector room to haggle with the amount owed. If John Doe owes $20K, but can only come up with $10K immediately, then the bill collector “cuts him a deal”. The objective is to try to get the John Doe to pay off his debt as soon as possible. The bill collectors back the office are in groups, sometimes called pools, and they do all work against each other. It is a cutthroat business.

According to my brother, this is the bottom line: Everything Mr. Hand posted can happen. But the probability is close to zero. The most sure way a collection agency gets you is when they have figured out where you work. Once they have that info, it is over. They go to court and garnish wages. If someone is being uncooperative or avoiding the phone calls, my brother’s SOLE purpose is trying to figure out where they work. If they do not work or get paid under the table, then it’s a dead issue for him. he moves on to the next person on his list for the time being. In a couple of months, he returns to the original John Doe, runs a credit check, etc, anything, to see if employment has been established since last time.

Please keep in mind that laws may vary from state to state, and different companies may resort to different legal tactics.