When finances are tight, it can sometimes seem like you have no other option but to miss some credit card payments. But what are the possible ramifications of repeatedly failing to make payments on your credit cards? Some people fear being arrested or going to jail for excessive missed payments — but is that possible?
Thankfully, you cannot be sent to jail for failing to make minimum payments on credit cards. Debtors’ prisons (yes, they really existed) is no longer a punishment for unpaid credit card debts. The only debts that can lead to jail time are unpaid taxes and child support.
However, while you may not be spending your nights in jail for unpaid debts, you can still be taken to court, and failing to show up to court can indeed lead to jail time. Dealing with debt collections through stressful court dates and hearings is no picnic, but as long as you are appearing in court, you can’t be put in jail.
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Can Credit Card Companies Take You to Court?
Yes, credit card lenders can take you to civil — but not criminal — court for failing to pay credit card debt. The main difference between the two is that civil court tends to be between two individuals or corporations, whereas criminal court typically involves formal government charges against an individual.
If found guilty in a civil court case, the defendant will likely be asked to pay the charges ordered by a judge. This often means additional fees and penalties, but you won’t be charged with a felony or misdemeanor — yet. If you end up not paying your fees after the rulings, then you may face criminal penalties.
If There Is a Judgement Against You for Credit Card Debt…
Debt collectors will do everything they can to get what’s owed on credit card debts. While they generally can’t have you arrested or jailed, lawsuits over unpaid debts can lead to other penalties forcing you into repayment. If a credit card company files a lawsuit against you in civil court and wins a judgment against you for your debt, they may attempt to collect money from you in several different ways. They may:
- Garnish your wages;
- Get a bank account levy, giving them access to your funds;
- File an execution against your personal property, giving them the right to seize and sell your personal belongings to satisfy the debt;
- File a lien against your real estate.
Note, however, that they can only do the above if they successfully win the legal rights to do so. If they begin making threats to do the above without first having won the case in court, they may be acting illegally.
What If Debt Collectors Threaten You With Jail or Arrest?
Although you can’t be arrested and put in jail for unpaid credit card debts, being sued by collection agencies often results in court orders to resolve unpaid debts. If you fail to follow through on court-ordered payments, the incarceration is possible.
At times, it can feel as though debt collectors hold all the power over your financial struggles, but following through with the legal orders the judge makes will help settle your case without arrests or jail time. Outside of this specific scenario, debt collectors cannot legally threaten you with arrest or incarceration. Don’t let them intimidate or bully you.
Has a debt collector threatened you with jail or arrest? If so, you should file a complaint with the Federal Trade Commission. As noted by the organization, collectors are not allowed to deceive debtors with such threats.
States Where You Can Go to Jail for Credit Card Debt
If you fail to appear in court or fail to pay court-mandated fees, you may face criminal penalties for violating court orders in some states, which can technically lead to arrest or jail time. This usually only happens if you’ve refused any court summons or failed to fulfill the agreements made in court. Violating these orders can land you in jail, but not the debt itself.
There are 25 states where this applies. As noted by the American Civil Liberties Union, these states include:
- Arizona;
- Arkansas;
- California;
- Colorado;
- Florida;
- Illinois;
- Indiana;
- Kansas;
- Louisiana;
- Maryland;
- Massachusetts;
- Michigan;
- Minnesota;
- MIssouri;
- Nebraska;
- Ohio;
- Oregon;
- Pennsylvania;
- Rhode Island;
- Tennessee;
- Texas;
- Utah;
- Washington;
- Wisconsin.
Communicating With Credit Card Lenders
Understanding how credit cards work can be difficult — especially when it comes to missed payments. You’ll likely want to avoid any conflict with your credit card provider, but financial predicaments do happen. The number one thing to keep in mind is communication. A collection agency wants you to pay back what’s owed more than anything else.
To this end, keep in mind that you can negotiate for reduced payments or credit card debt settlements. Being upfront about any financial issues that you are struggling with will make creditors much more likely to grant some clemency in this fashion.
Communicating with debt collectors about any issues that might arise in your case is an essential tool for avoiding court orders, wage garnishments, and a wrecked credit score. And of course, settling any debts payments with collection agencies as soon as possible will get you back on track to achieving more financial stability.
Falling behind on credit card payments can be stressful, worrisome, and draining. These feelings are only heightened when legal penalties begin popping up over unpaid debts. Court dates, fees, wage garnishment — you may also be worried about serving jail time for your credit card debt.
While incarceration is not likely to happen over unpaid credit card debts, delinquent credit card debts can lead to a ruined credit score, fees and penalties, and time in civil court.
It’s important to be well-informed about your rights and responsibilities as a credit card holder, and keep up with your payments to avoid going up against debt collection agencies.
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