Debtor Prisons Popping Up Across America

By Keith Johnson

While Wall Street banks are being rewarded billions in taxpayer-funded bailout money to recover from risky financial schemes, cash-strapped Americans around the country are being jailed for simply not having enough money to pay their bills.

Many believe that debtors’ prisons were abolished in the United States during the mid-1800s, and that this archaic institution now only exists in the most repressive of societies. However, in recent years, courts of law in more than a dozen states have been exploiting a legal loophole that allows creditors to essentially hold borrowers for ransom against their delinquent financial obligations.

How do they do it? In most cases, lenders will secure a civil judgment against a debtor and summon them before the court for an “examination” of their assets. If they fail to appear, a “body attachment” warrant can be issued for their arrest and the defendant can be held indefinitely until the debt is paid.

In Hancock County, Indiana, a warrant was issued for small business owner Jeffrey Stearns because he owed $4,024 on an auto loan to a subsidiary of American International Group, the same financial institution that received $122.8B in taxpayer bailouts. Stearns was arrested by deputies in the presence of his four young children, strip-searched, sprayed for lice and held in jail for two days until he agreed to pay a substantial portion of the debt.

Similarly, Emmie Nichols of Bement, Illinois, was arrested at her mother’s house for missing a court appearance on a $1,159.87 credit card debt she owed to Capital One, a recipient of $3.65B in federal bailouts under the Emergency Economic Stabilization Act of 2008. Ms. Nichols was eventually released after posting a $500 bond, which was ultimately surrendered, in full, to the bank.

But credit card and auto loan delinquencies aren’t the only things Americans are being locked up for. In Herrin, Illinois, cancer survivor and teaching assistant Lisa Lindsay ended up behind bars for a medical bill she was told she didn’t owe. “She got a $280 medical bill in error and was told she didn’t have to pay it. But the bill was turned over to a collection agency, and eventually state troopers showed up at her home and took her to jail in handcuffs,” the Associated Press reports.

Donate to us

“We have created a de facto debtors prison system in the United States that is largely unconstitutional,” Judith Fox, a law professor at Notre Dame Law School said. “In some parts of the country, people are so fearful of arrest they are scrambling to pay money they might not even owe.”

Arrests aren’t the only thing people are afraid of. In their quest to compel impoverished debtors to pay up, some collection agencies have resorted to making extremely horrific threats. According to, the Federal Trade Commission (FTC) recently closed down Texas-based debt collector, Goldman Schwartz, for threatening to send child services after the minor children of people who were behind on their payday loans.   

Another collection agency, Rumson, Bolling & Associates, “allegedly threatened to dig up the bodies of debtors’ deceased children and hang them from a tree or drop them outside their door if they failed to pay their funeral bills.” The same company is also said to have “told a woman they would have her dog ‘arrested…shoot him up…and eat him,’ before sending the police to her house to arrest her, the FTC claimed.”

Meanwhile, as unfair courts and predatory lenders continue to employ an iron fist against the poorest Americans, kid gloves are applied when dealing with Wall Street executives.

In a recent Frontline documentary, entitled The Untouchables, Lanny Bruer, Assistant Attorney General for the Criminal Division of the U.S. Department of Justice, was asked why he failed to pursue criminal charges against the mortgage security fraudsters who were responsible for the economic meltdown of 2008.

“I am personally offended by much of what I’ve seen,” Bruer replied. “I think there was a level of greed, a level of excessive risk taking, that I find abominable and I find very upsetting. But that is not what creates a criminal case. What makes a criminal case is that I can prove beyond a reasonable doubt every element of a crime.”

Since Americans can’t rely on the federal government to hold these bankers accountable for their debt to society, perhaps it’s time to pursue civil action in our local courts. On the off chance that a judge finds them liable, and they fail to appear for an “examination” of their assets, we can then request a “body attachment” warrant and hold each one in custody until they return every last cent they bilked from the U.S. economy.

Unfortunately, that’s not the kind of “justice” system we have in America.

Keith Johnson in an investigative journalist and host of the Revolt of the Plebs radio program.