Debt Collectors Using A Back Door To Debtors' Prison?There seems to be a disturbing trend developing nationwide, many debt collectors are manipulating the court system in an effort to imprison debtors who have defaulted on their loans.  Here’s what is happening?

Very small debts are being bundled and sold to debt collection companies. Small debts, which are often under $100 each, are bundled together by the debt collector who then pursues the debtor for payment.  The only problem is that they are taking a short cut via the court system.  Many debt collectors are literally carpet bombing state courthouses with lawsuits against debtors, failing to issue proper notices to the delinquent debtors and when the debtor fails to show for the court hearing, they win default judgments.  But here’s the twist.  Debt collectors aren’t just taking their default judgments and pursuing bank accounts and wages alone, they are now asking courts to schedule another hearing at which the judge can investigate the assets of the debtor and then when the debtor does not show up for that hearing, they ask the court to order the debtor in contempt of court and to issue a warrant for their arrest.  And if that seems to be bad, it only gets worse.  The judge sets the cost of bail, which is usually the price of the judgment. Once the bail is paid it is turned over to the creditor.   So the creditor is effectively able to leverage the court system in a way that makes the courts an extension of their collection efforts which is not the purpose of the courts.  Many of these debtors have disputed debts and/or they are not being properly notified by the creditor that there is a lawsuit. The creditors are now using jail as a type of blackmail, because let’s face it, who is not going to pay the bail to get out of jail.

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