Can Unpaid Debt Send You to Jail?

Is it possible that not paying on your debts could land you in jail?  The answer is no. 

Unfortunately there are some unethical creditors and debt collectors out there that make inaccurate and illegal threats.  There is no debtors’ prison.  A long, long time ago people were put in jail for not paying on their obligations, but our thoughts on debt have evolved over the years. 

It’s now understood that you shouldn’t keep people in jail just because they can’t pay their debts.  Doing so would mean they could no longer be productive citizens, earn income, reestablish their lives, or ever hope to pay anyone back.  You will never be put imprisoned for not paying your debts. 

However, if some sort of fraudulent or criminal activity has taken place it’s a different story.  Falsifying financial statements or other illegal activity undertaken in order to acquire credit could result in criminal action.  But if you have been honest in your applications for credit or loans then simply find yourself unable to pay it, that’s not illegal.  So what can creditors and lenders do when someone has acquired debt but failed to pay? 

There is some legal recourse.  If they have attempted to collect and been unable to do so they are within their rights to sue you.  This may result in a judgement from the courts saying that you are in fact responsible for what you owe, but no one is going to send you to jail. 

Those days are over.