Monthly Archives: February 2014

When a Collector Threatens You With Jail

There are two scenarios that I have seen where purported debt collectors have threatened people with jail.  One of them is an out and out scam.  The other is just illegal.  The scam is the most common so let’s start there.

  • Collector calls and tells you that if you don’t pay a certain bill immediately, the Sheriff is going to come to your house and arrest you.  You have to pay this today.  You are going to be arrested tomorrow.  The only way you can pay this is by electronic funds transfer from your checking account over the phone RIGHT NOW.  You cannot mail in a check — even a certified check sent next day delivery.  Nope.  It must be over the phone, straight from your checking account RIGHT NOW.

When was the last time a legitimate debt collector wouldn’t take a cashier’s check by mail?  They are so interested in keeping you out of jail that they would rather not get their money?  Really?  Does this sound like any legitimate debt collector you have ever spoken with?  Any debt collector who won’t give you a mailing address and who won’t take a cashier’s check is not really a debt collector.  A colleague of mine traced one of these calls.  It was a voice over IP call, and somehow he was able to track the IP address of the originating computer.  It was in Pakistan.

The second scenario is just an overly aggressive collector who gets carried away.  My favorite example of this is the debt collector who told a woman that if she didn’t pay her credit card account, he was going to call DHS and have them take her children away, because she was obviously an unfit Mother.  That is what is known as a violation of the Fair Debt Collection Act.  It also violates a number of State laws.  That debt collector was sued by a friend of mine for that call, and the case settled for a not insubstantial amount of money.

These scenarios work, because the collector gets the debtor scared enough to stop thinking rationally.  Consider carefully, how many children would we have in foster care in this Country if not paying your credit cards made you an unfit parent?  Not only am I not sure I can count that high, but how many news stories about this would it take before the tax payers told our legislatures to find better ways to spend our tax dollars?  Have you ever seen a television news story about this?  If it happened, don’t you think you would?  What better television than a poor, weeping, hysterical woman who has lost her children because the ex didn’t pay child support, and she has been too ill to work?  Do you really think the local news stations have too much class to air this?

Now, here is where this whole issue gets sticky.  It is easy to say that you can’t go to jail for debt in this Country, and technically that is true.  You can, however, go to jail for violating a court order; and if that order is to pay a debt — most commonly child support, and you don’t do it, well, you can go to jail for willfully disobeying the Court’s order.  The standards for that are going to vary from State to State, but even though technically this is punishment for disobeying the Court, it is effectively imprisoning someone for not paying a debt.  It is very effective at getting recalcitrant parents to pay their child support, by the way.

Another variant on this is that if you are ordered to appear for a Hearing on Assets by a creditor who has a judgment against you, and you don’t appear; well, a bench warrant can issue for your arrest.  Again, the warrant is for disobeying an order of the court to appear and provide information; but it can be an effective collection tool nonetheless.

One thing to notice about both of these scenarios, they involve judgments, court orders and lawyers.  They don’t involve telephone calls, and before you can violate a court order, you have to have been given notice of that order.  That means you have to have been a party to a lawsuit.  Ask the guy who is calling you, threatening to put you in jail, for the case number of the lawsuit.  Odds are he will tell you that he didn’t have to sue you.  Those laws don’t apply to him.  Well, maybe they don’t — in Pakistan.

I will say, though, that these calls are only effective if the person receiving the call has problems with debt.  So, if this happens to you.  Don’t get so scared that you lose your grasp on reality.  After all, you don’t know ANYONE who has gone to jail for not paying a credit card.  Ask for a mailing address.  Real debt collectors will always take a cashier’s check by mail.  They really just want their money.  Ask what order you have violated, in what court case and ask for the case number.  Then hang up.

Oh, and after you hang up — call a lawyer.  If you are getting calls like that, and they are elevating your heart rate so much as one beat per minute; it is time to call for help.


A Debtor By Any Other Name

I used to think I was being facetious when I told my clients that one of the more challenging things about the whole Bankruptcy process was being asked their name at the First Meeting of Creditors.  You know, strange place, strange people, crowded room, being placed under oath and then being asked QUESTIONS – beginning with, “Would you please state your full name for the record?”  Tough, huh?

Of course, as with many things that seem silly when one is young and foolish I have gained some real respect for the difficulty of this question.  Despite the fact that this sounds like the setup for a punch line, periodically I really do encounter someone who isn’t completely sure what his name is – or isn’t – or used to be.

This issue hit the popular press during last Fall’s elections when a number of States had new voter ID laws go into effect.  A number of people, including quite entertainingly a number of fairly high profile politicians, had difficulty voting because their name wasn’t exactly the same across a number of different documents.

Here are a few scenarios:

  • Woman gets married.  She begins using her Husband’s surname, but she doesn’t change her driver’s license, her Social Security records, and she continues to use her maiden name on her tax returns, because otherwise, her tax return wouldn’t match her Social Security records.
  • Man has a son.  Man names his son after himself.  Son is now John Doe, Jr.  So, Dad starts calling himself, John Doe, Sr.  Really?  Having a child changes your legal identity?
  • Woman gets divorced.  In Oklahoma divorce decrees usually include a provision restoring the woman to her maiden name, or another former legal name, if she has requested that.  So, when the decree is entered, there is an order from a Court signed by a Judge determining that the woman’s name is now legally her former name.  Except that changing your name can be such a hassle.  So, sometimes the divorce is finalized, but months later the woman is still using her married name and just hasn’t quite gotten around to changing anything yet.

It wasn’t that long ago when names were about personal identities and not legal concepts.   This change has been happening for a long time.  Regardless of what we may or may not think or like about that idea, once 9/11 happened there was no going back.

So, if you are thinking you might need to file for bankruptcy, get a passport or vote; it might be time to consider whether or not you know who you are, and whether or not your available documentation supports that opinion.