Imagine my surprise to see a Yahoo!Finance.com piece titled “The Return of Debtors’ Prisons”. Why, just one year ago, in a long and detailed Bankruptcy in Indiana article, I explained that debtors’ prisons were federally abolished in the United States in the 1800’s!
What’s even more startling, as my colleague the Columbus bankruptcy lawyer likes to reassure her clients, the right to bankruptcy was considered so basic and fundamental, it was written into our Constitution!
I’m often asked by clients who are considering filing personal bankruptcy in Indiana – are debtors’ prisons dead or aren’t they? As an Indiana lawyer with twenty five years of experience, one who actually helped write bankruptcy exemptions law in this state, I think I’m well qualified to answer that question.
Can debtors, in this second decade of the 21st century, ever go to prison? Yes, but only those who:
- purposely evade child support or alimony
- defraud other citizens
- cheat the IRS (Here’s the one I want to focus on in today’s Bankruptcy in Indiana article) fail to appear at a court-ordered hearing.
As we in the four Zuckerberg bankruptcy law offices work to help stop foreclosure, offer payday loan debt help and student loan debt help, we’re constantly reassuring clients that Indiana follows Federal Debt Collection law.
And what Federal Debt Collection law makes clear is that borrowers must have been notified of any hearing or lawsuit and then have failed to respond before a judge is allowed to issue an arrest warrant.
So, while debtors’ Prison itself is legal in a number of states, as a debtor, you have rights. To help you protect those rights are:
- the Better Business Bureau
- the Indiana Attorney General
- the Federal Trade Commission
The filing of bankruptcy in Indiana (whether Bankruptcy Chapter 7 in Indiana or Chapter 13 bankruptcy law in Indiana) stops virtually all collection and legal proceedings pending against you, including lawsuits and hearings. The only exceptions are criminal proceedings and alimony and child support collections.
But I repeat myself…. No prison for honest debtors!
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg