Bail me out of jail?
De-facto debtors’ prisons in Illinois, the Deadbeat StateRead more: http://www.stltoday.com/news/opinion/columns/the-platform/editorial-de-facto-debtors-prisons-in-illinois-the-deadbeat-state/article_88f1e45b-5b22-5c7e-b809-8cfd8a3b76c6.html#ixzz1jADXHN3P
So here’s the state of Illinois, which slow-pays its vendors, which has $85 billion in pension obligations it cannot meet and which last week bounced $159,000 worth of lottery checks. And yet the “Deadbeat State” allows its judges to throw people in jail who cannot pay private debts.
And you thought debtors’ prisons went out in the 19th century.
On Monday in Alton, the state Department of Financial and Professional Regulation held a hearing on the practice, which appears to be more prevalent in southern Illinois than in central and northern counties. The department regulates banks and other financial institutions, including payday loan and consumer finance companies. A second hearing will be held Wednesday in Marion.
The department is considering asking the Legislature to change state law to prohibit the incarceration of individuals who legitimately don’t have the resources to pay their debts. What a concept.
A debtor typically winds up in jail in Illinois when his creditor files a complaint in court and the debtor fails to answer the summons. Many of those who wind up in jail may have moved or have no fixed address or can’t understand the legal papers.
If the debtor finds himself pulled over by police for an unrelated matter, often a traffic stop, the computer shows that a “body attachment” has been issued by the court, and he is arrested and jailed.
Is he there because he owes money? Technically, no. He is in jail for violating a court order. But the reason for the court order is the debt, so it’s a distinction without a difference.
In some cases, when friends or relatives arrive to bail the debtor out jail, the bail money goes directly to the creditor.
Last fall, Illinois Attorney General Lisa Madigan told The Wall Street Journal that she wanted to crack down on the fast-growing debt-collection industry. Such firms typically buy consumer debt for pennies on the dollar, then go hammer-and-tong to collect them.
“We can no longer allow debt collectors to pervert the courts,” Ms. Madigan told The Journal. She said she would urge judges to reject warrant requests from debt-collection firms.
In 2010, the Department of Financial and Professional Regulation revoked the business license of a Carbondale-based payday loan company. The department said that the firm had threatened at least four customers with jail time if they failed to repay their loans.
The company reached a settlement with the state agency last summer, admitting no wrongdoing but agreeing to stop the practice of requesting writs of body attachment.
State law already allows creditors to seek court orders garnisheeing up to 15 percent of a debtor’s wages. This is not always useful; some debtors may, in fact, be deadbeats, but others are in debt because they’ve lost their jobs. Social Security and other retirement benefits, insurance and public assistance can’t be garnisheed.
Debtors have an obligation to work out a payment schedule if at all possible. At the same time, creditors have an obligation to understand that sometimes it’s impossible. The state’s job is to legislate what’s reasonable; for courts to act as agents for collection agencies fails that test.
And let’s face it: If the state allows deadbeats to be jailed, Springfield is going to need a bigger jail.