Well, many of us in the United States are unaware of the policies which can be used against the people when the debts are not paid on time. In a worse situation, you may be wonder can you go to jail for not paying a debt?
This will not only ruin your career but also stain your reputation. So,? Read this article to know the answers.
Here you will get the answers to your debt riddles and you must also be aware of the states where you can get arrested for not clearing the debts.
- * Washington
- * New Jersey
- * Illinois
- * Georgia
- * Ohio
- * Indiana
- * Tennessee
So, now you may be wondering if the debt collector asserts the right to sue you. So, have a brief idea about what actions can be taken against the debt collector.
Can a debt collector sue you?
Yes, a debt collector can take legal action against you. If a creditor takes you to the court over an unpaid debt, you should make it a point to respond, either through an attorney or on your own, to the lawsuit.
Sometimes creditors will take this action to obtain a court judgement against the debtor to collect the unpaid amount. If the debtor doesn’t show up in the court, then the judge can issue an arrest warrant for failing to appear.
So, the debtor could be sent to the prison not for failing to pay the debt but for failing to follow the court order.
What is a Statute of Limitations on debt?
Yes, there is Statute of Limitations (SOL) period within which the creditors or debt collectors can file a lawsuit to recover. The SOL can differ state wise and debt wise with most falling between a 3-6 year range, while some may be as long as 10 years. The length is decided by the state and the type of debt.
According to the Consumer Financial Protection Bureau (CFPB), the number of years is determined by:
- 1. State Laws
- 2. The kind of debt you owe
- 3. If the state law applicable is mentioned on your credit agreement
How can you avoid going to jail for not paying your debt?
So how can you make sure that you will never go to the wrong side of a jail cell door especially if you have debt?
- a. Do not ignore debt collectors or warrants. Act strictly against it if possible.
- b. Make sure you have gone through all the documents you get from bill collectors or the court.
- c. If you get a summons and complaint, you are probably being sued. This means your presence is highly required in the court.
- d. It is your duty to respond quickly and promptly to a summons, either denying or admitting to the debt.
- e. Appear for all the court hearings.
So, avoid getting into any trouble by checking your debt amount and if you are being sued or given a court date, show up!
If you don’t, you may end up losing by default, and have a warrant against your name.
Can the Statute of Limitations on debt affect your credit score?
Yes, your credit score can be affected even if the SOL on a debt is no longer valid. Any debt you owe will appear on your credit report. If you can’t make payments, those debts can stay on your credit reports for as long as 7 years, impacting your credit score negatively. As a result, it can be quite taxing while obtaining a new credit card, home loan, or to take a car on lease, and if isn’t approved, then the interest rates could be high on your future loans.
What kinds of debts can get you arrested?
Yes, there are 2 types of debt for which the failure to pay could imprison a person.
- Failure to pay your taxes
- Failure to pay child support
If a person is unsuccessful in paying taxes, it can make him/her land in jail. The same thing implies for neglecting child support payments. Failing to do so can be considered contempt of court and can result in imprisonment for up to 6 months. There can also be fines for each violation in addition to the fees taken by attorneys and court costs.
Can you get arrested for unpaid student loans?
No, you won’t be going to jail or be arrested for not paying your student loans.
Failure to pay a student loan, credit card, or hospital bill is considered “civil debts” and you won’t be arrested for not paying your student loans or civil debts.
The department of education suggests several options for borrowers to get back on track with payment if you are lagging behind on paying your student loans.
Always remember that failure to repay student loans could also result in wage garnishment.
How can you escape from this mess?
You can escape being sued by an aggressive debt collector by considering the following:
Be skeptical: Get your facts checked, including whether or not the debt is yours and the amount is correct, by verifying the debt.
Stay on your toes: Do not feel burdened when dealing with debts. Don’t make hasty decisions. Take your time to find out the best way to handle a debt in collections. Don’t make hasty decisions.
Address your rights: Report harassing debt collectors to the Consumer Financial Protection Bureau.
I would like to mention that people who are in debt generally have this fear that they may be arrested for not paying their debts within the due time. Well, this is not entirely true. Debt collectors are known to warn debtors about going to jail if the debt is not met on time. Not only are these threats banal, but they also wrongdoing by the debt collector.
In fact, debt collectors assert the right to sue your debt collector for not paying the bills under the Federal rule and the potential state law depending on which state you reside in. To conclude, if you aren’t serious then you can go to jail for debt collections. So, take precautions to avoid that scenario.