Here are the only two reasons you could go to jail over unpaid debt


As consumers spend away for the holidays, many people are using their credit cards to buy gifts. That means that come January or shortly thereafter, those bills will become due. If you don’t pay at least a portion of what you owe, you may soon get a call from the dreaded debt collector.

Debt collection agencies have employed various tactics through the years, including intimidation and straight-out lies, to get you to fork over what you owe — plus any added fees.

One tactic that has become especially effective — and is generally illegal — is the threat of jail time.

The Federal Trade Commission (FTC), whose job it is to enforce the Fair Debt Collection Practices Act, documents a case in which the National Check Registry, based out of New York, was routinely violating consumers’ rights by allegedly using “outrageous” methods to scare people into paying their debts.

“Among the alleged tactics that National Check Registry used was telling people they had committed check fraud or another crime and threatening them with lawsuits, garnishments, arrest or imprisonment if they didn’t pay,” the FTC says on its website. “The FTC and the State of New York alleged that National Check Registry routinely told people they had to pay within 12 or 24 hours to avoid having a local court system or law enforcement agency come after them.”

Can you really go to jail for not paying a debt?

Money expert Clark Howard says, “If you legitimately owe a debt, you have specific rights under federal law. You have the right to tell a collector never to contact you again. Use a drop dead letter and send it via certified mail. You can still, however, be sued against the debt even after sending this letter.”

When it comes to debt collectors, those who threaten to have you arrested and put into jail are themselves running afoul of the law, according to the the Fair Debt Collection Practices Act. There are, however two instances in which debt can land you in the slammer.

Two unpaid debts you can be locked up for

The first debt that you can indeed be prosecuted and put behind bars for is failure to pay taxes, better known as tax evasion or, in the words of the IRS, tax fraud. It can take many forms, including not reporting income, claiming expenses for work not actually performed or owed, or simply not paying taxes.

In 2016, the IRS launched nearly 3,400 investigations related to tax fraud, resulting in 2,672 convictions that yielded an average of 41 months behind bars. That’s some serious time!

The other unpaid debt that can result in handcuffs, steel bars and “three hots and a cot” is failure to pay child support. The most common method that municipalities use to lock deadbeats up is to prosecute them for “contempt of court,” meaning that the deadbeat disobeyed a court order.


Contempt of court related to unpaid child support is some serious stuff, and it could get compounded, depending on the complexities of the case. Other related charges could be levied as well, like desertion or child abandonment — all for not paying the debt.

In summary, you want to make sure you pay your debts. Clark says one way to protect yourself from harassment and illegal threats is to “always record any calls from/to a collector. Both parties must consent to recording in California, Connecticut, Florida, Hawaii, Maryland, Massachusetts, Montana, New Hampshire, Pennsylvania, and Washington.”

RELATED: More sample complaint letters

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