Some creditors use harsh tactics to get debtors to pay up

December 12, 2011

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With a slow economy, the number of debtors going to jail in Illinois is on the rise.

It's illegal in Illinois to throw a debtor in jail for not being able to pay, but some creditors are getting around that. A collection agency can file a lawsuit which might require a court appearance. If the debtor doesn't appear at the hearing, a warrant can be issued for their arrest.

Illinois Attorney General Lisa Madigan said in some cases, the court notices aren't being served.

"We hear time and again from the legal aid lawyers who ultimately find out often about these people when they're in jail that people didn't even know there was a lawsuit against them, let alone a judgment had been entered," Madigan said.

People have been stopped for minor traffic violations, but then arrested and sent to jail after police found the warrant in their file. Legal aid attorneys have said this is more of an issue in rural parts of the state. Madigan said it often happens to people with little to no income, and they usually don't know their exemption rights as a debtor. The amount owed is usually a small amount. Money used to bail the debtor out of jail often goes directly to the creditor.

Kevin Kelly with the Illinois Creditors Bar Association said creditors don't want to send people to jail. He said members of his organization don't issue warrants unless it's an extreme situation. 

"The whole idea is to make contact with the debtors and somehow structure an arrangement to hopefully repay the debt. We welcome them to contact us, to call us and talk about the situation," he said.

Kelly said most creditors are willing to make reasonable arrangements with people who are struggling to pay. But he said it's difficult when the vast majority of people don't respond to letters of demand.

"So we’ve got five notices that have already gone out either by personally serving them or that have gone out by mail, five separate notices. And we’ve received absolutely no response to any of them. I’m not certain what more we can do," Kelly said.

Madigan said more could be done to prevent debtors from needlessly being jailed. She said courts around the state need to be certain they have accurate information to serve legal notices. She also said her office is investigating creditors that could be abusing the law. Her office has sued six creditors since 2006.