If you have a lot of unpaid credit card debt, you may be getting scary phone calls from debt collectors. But can you go to jail for credit card debt?
No, you cannot be arrested for failure to pay your credit card debt. However, there are some serious potential ramifications for not paying your bills. You could even face a civil lawsuit if you don’t pay off your credit card debt. Read on to find out why you should avoid letting credit card debt pile up.
What Happens if You Don’t Repay Your Credit Card Debts?
First, despite what a debt collector might threaten you with, the answer to the question of can you go to jail for not paying credit cards is no. However, there are other penalties for not paying your debt, and they can be damaging. Here’s why.
When you sign up for a credit card, you agree to repay the charges you make, plus any applicable interest and fees. If you fail to make those agreed-upon payments your account will become a delinquent credit card account. Your account is considered delinquent if you don’t make your payment by the due date. Oftentimes, you’ll be charged a late fee after about 10 days, which will be added to the amount you already owe. At this point, you may want to reach out to the credit card issuer about negotiating credit card debt and inquire about credit card debt forgiveness.
However, if, after a full billing cycle, you still haven’t made a payment, the credit card company will typically report you as delinquent to the three major credit bureaus. Consequently, your failure to pay will be indicated on your credit reports, which will damage your credit score. A delinquency can remain on your credit report for years. The card issuer will contact you to attempt to get you to make payments. If you don’t they will eventually sell the debt to a collector. The collector will likely be more persistent, taking every legal action to get you to pay. If you still refuse to pay your debt, the debt collector will likely file a civil lawsuit against you. If that happens, you will receive a summons to appear in court, and you will have the opportunity to present your case in front of a judge. If you fail to appear in court, you could be jailed for that offense.
If the judge rules against you, there will be a civil judgment issued stating that you owe the debt collector money. If you don’t pay the judgment, the debt collector could petition the court to garnish your wages or seize your property, depending on the laws of the state you live in. And in the most extreme cases, it is possible to be jailed for failing to obey a court order, which is technically different from going to jail for credit card debt.
What Can Credit Card Debt Collectors Do?
Debt collectors have several tools available to attempt to get debtors to pay, but their actions are limited by law. For example, they can contact you by phone, email, postal mail, text messages, and via social media. After reaching you, they have five days to send you documentation about the name of the creditor and how much you owe, and give you a chance to contest the debt. Under the Fair Debt Collection Practices Act (FDCPA), debt collectors aren’t allowed to lie to or harass you. They are prohibited from making false claims and threats like having you arrested or jailed. They cannot contact you before 8 a.m. or after 9 p.m. without your permission. And if you ask them to stop contacting you, they must stop (you will need to inform them of this in writing). They are also prohibited from telling anyone other than your spouse about the debt.
What Kind of Debts Can You Go to Jail For?
While you can’t go to jail for failing to pay your credit card bill, there are a few debts that you can go to jail for.
In some states, you can go to jail for failing to pay child support. This can be for a civil violation or, more rarely, for criminal contempt of court.
Not paying your taxes is a crime, and those who are convicted could be sentenced to prison.
Contempt of a Court Order
While you cannot be jailed for failing to pay credit card debt, you could be sent to jail for violating a court order to pay the debt.
Avoiding Aggressive Debt Collection Efforts
There are several things that you can do to protect yourself from aggressive debt collectors.
Review Your Rights Under the FDCPA
You should familiarize yourself with and know your rights under the federal Fair Debt Collection Practices Act. According to the FDCPA, debt collectors can’t use abusive or harassing techniques, such as threatening to send you to jail.
Check Local and State Debt Collection Laws
Beyond the federal law, your state or city may have its own laws restricting what debt collectors can do. For example, Ohio gives debtors 28 days to answer or respond to a complaint by creditors. If a debtor does not file an answer, or if they ignore a legal summons and complaint or fail to appear in court, creditors can win the case by default and receive a judgment against the debtor. Learn about the laws in your area.
Read and Respond to Papers or Messages From the Court and the Collector’s Attorney
Do not ignore any documents or lawsuits from a court or the collector’s attorney. Failing to respond to a lawsuit or legal action could result in a default against you. At this point, you may want to consider hiring an attorney to help you.
File for Bankruptcy
If you can’t repay your outstanding debts, as a last resort, you could consider filing for bankruptcy. However, filing for bankruptcy will stay on your credit report for years and will make it difficult to borrow money in the future. The consequences are serious, and you should only consider bankruptcy in consultation with an attorney.
Managing Your Credit Card Debt
Paying off credit card debt can help you avoid debt collectors as well as the negative consequences discussed above. Consider reaching out to a non-profit credit counselor for assistance. They can help you create a plan to manage your debt and pay it back. There are also strategies for reducing credit card debt, such as creating a budget and controlling your spending. You can also check into credit card consolidation strategies, which can be helpful if you have several credit cards to pay off. Combining them into a single account may make your debt easier to manage.
While you can’t go to jail for failing to pay your credit card debt, there are serious consequences for outstanding debts that could impact your credit for years. You could even potentially face a civil lawsuit in extreme cases. That’s why it’s important to pay off your credit card debt. If you’re having trouble doing so, contact your credit card company before your account becomes delinquent to try to work out a repayment plan.
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