Debtors’ prison was supposedly eliminated in the United States in the 19th century, but in the 21st, people are still being arrested and tossed into jail for debts. It just takes an extra step these days.
This morning, I sat in court and watched a debt collector get six bench warrants for debts under $1,000. I recognized the names of all the plaintiffs: Palisades, LVNV, and Capital One. Palisades and LVNV, and maybe Capital One, probably would not have won their lawsuit if the defendants challenged them. But each defendant defaulted when he or she did not answer the lawsuit, and gave up their right to challenge it.
After getting a default judgment, the debt collector asked the court to issue an order for disclosure. An order for disclosure orders the debtor to disclose his or her assets—where they keep their money. Like any other court order, failure to obey will result in jail time. This makes perfect sense under ordinary circumstances, but debt collectors use the courts like an assembly line leading to jail.
The problem is not necessarily the court rules and Minnesota statutes that the debt collectors are using. Defendants should have to answer a lawsuit to challenge it, and court orders must be enforceable. But in order to do those things, defendants must understand their rights, as well as the documents they receive. Unfortunately, the rules and statutes, along with the court’s forms, are practically incomprehensible to non-lawyers. As a result, non-lawyers, like the defendants who will be tossed in jail as a result of what I saw this morning, probably had no idea how to answer their lawsuit, or that they would go to jail if they did not disclose their assets.
Debt collectors are just taking advantage of a system that is unfriendly and nearly impenetrable to non-lawyers.