Monday, June 28, 2010

In Minnesota, debtors’ prison is not a thing of the past

I have a new post up at Global Comment

The term ‘debtors’ prison’ immediately conjures images of the mid-nineteenth century, when both men and women were locked in prisons until their families could afford to pay off their debt. For some, it will bring up images of a city like Dubai, where a form of debtors prison exists today.  Overall, the idea of being arrested because of debt — or having your property seized –is quite unfathomable to most Americans, and yet it is happening around the world on a daily basis.

The Minneapolis Star Tribune recently printed a great investigative piece in which they documented this phenomenon. 

It seems that debt is being sold to collection companies for pennies on the dollar, who then go to extreme measures to collect. In many cases, this debt is several years old. Essentially what happens is that a company tries to contact the debtor and after several failed attempts, they get a summons for the person to appear in court. If the person does not appear in court, a warrant is issued for their arrest. At this point, the law then aids the company by arresting and jailing said debtor at the tax payer’s expense.

Warrants are acted upon in jurisdictions where law enforcement can spare the manpower to act upon them. There is clearly collusion between law enforcement and these companies, because judges have reportedly set bail in the amount of money owed.

Apparently, incidents of individuals being arrested for debt are on the rise and it is hardly surprising given the state of the global economy. In many cases, people do not recognize the name of the pursuing company and are less likely to respond to collection attempts, because it is not the same business by which they were originally indebted. According to the Star Tribune, people are most often not even aware that an arrest warrant has been issued in their name.

That this is even happening is yet more proof of the irrationality of the capitalist system. The poor are specifically marketed high-interest loans that are beyond their ability to pay.

Finish reading here