Debtors' prisons make an American comeback

Alain Sherter of CBS MoneyWatch and the AP report on the disturbing resurgence of debtor's prisons in America. Though it is technically no longer legal to jail people for failure to pay their debts, the debt-collection industry has figured out how to game the courts to create a series of jail-able offenses related to nonpayment. These are largely legal tricks by which debt-collectors get court orders regarding debtors with which the debtors find difficult to comply, resulting in jail for violation of the court order, often over trifling sums.

Yet Illinois isn't the only state where residents get locked up for owing money. A 2010 report by the American Civil Liberties Union that focused on only five states -- Georgia, Louisiana, Michigan, Ohio, and Washington -- found that people were being jailed at "increasingly alarming rates" over legal debts. Cases ranged from a woman who was arrested four separate times for failing to pay $251 in fines and court costs related to a fourth-degree misdemeanor conviction, to a mentally ill juvenile jailed by a judge over a previous conviction for stealing school supplies.

According to the ACLU: "The sad truth is that debtors' prisons are flourishing today, more than two decades after the Supreme Court prohibited imprisoning those who are too poor to pay their legal debts. In this era of shrinking budgets, state and local governments have turned aggressively to using the threat and reality of imprisonment to squeeze revenue out of the poorest defendants who appear in their courts."

Some states also apply "poverty penalties," including late fees, payment plan fees, and interest when people are unable to pay all their debts at once, according to a report by the New York University's Brennan Center for Justice. Alabama charges a 30 percent collection fee, for instance, while Florida allows private debt collectors to add a 40 percent surcharge on the original debt. Some Florida counties also use so-called collection courts, where debtors can be jailed but have no right to a public defender.

Jailed for $280: The Return of Debtors' Prisons (via Naked Capitalism)

(Image: A_debtor_in_Fleet_Street_Prison_THS, Wikimedia Commons)