Woman holding her credit cards at the store.

Can Credit Card Debt Cost You Jail Time?

As the coronavirus pandemic continues to plague the world, many things have changed in an effort to protect the safety of American citizens. One thing that you may have noticed is that many businesses are now requesting that you use a debit or credit card for purchases. Additionally, with the increase of online purchases over the last several months, it becomes much easier to pay for things with a credit card. While credit cards can be extremely handy, they can also create a lot of debt. So what happens when you can’t pay it? 

The Federal Fair Debt Collection Practices Act

The good news is that debt collectors can’t arrest you for your credit card debt. In fact, under the federal Fair Debt Collection Practices Act, they’re not even allowed to threaten you with jail time or to conduct any other type of abuse or harassment. Unfortunately, for those that have dealt with debt collectors, the collection letters, phone calls, call at your workplace, etc., persist. If they are harassing you, you should report it to the Consumer Financial Protection Bureau.

While they can’t do any of these things, they can take you to court for payment.  Many of the major credit card companies hire debt collectors to pursue payment of their debts.  Debt collectors initially send demand letters for payment, after which they’ll file a lawsuit or complaint in a state court to pursue a judgment for payment.  In Texas, you are typically given 20 days from the date of service of the lawsuit to respond to a creditor’s complaint. If you fail to file an answer or ignore a complaint and legal summons, and fail to show up for court when you’re supposed to, your creditor can receive a judgment against you by default since you’re not there to defend yourself. 

What if You Can’t Pay the Judgment?

Despite what you may think, even if you don’t have the money to pay the judgment against you, the creditor has several avenues of recourse.  While it’s difficult to garnish wages in Texas for credit card and other types of debt judgments, we’ve had several clients in our office that have faced this very issue.  Additionally, the judgment creditor can place a lien on your home, and even pursue post-judgment discovery to determine whether or not you have any other assets to pay the judgment.  You are compelled under Court order to answer these post-judgment interrogatories truthfully, which means the creditor will have an opportunity to see which bank accounts you have, other property you have, and your general overall financial condition.  

What if You Still Can’t Pay Your Creditors?

If your creditors still can’t get the money from you, the court can require that you appear in court to give an explanation under oath regarding why you have been unable to pay. If you don’t attend this you can be found in civil contempt. If you don’t pay or don’t follow court orders and are found in contempt of court, the court will issue a warrant for failure to obey a court order. Absent theft or fraud, the only way that you could be sent to jail over credit card debt is if you defied a court order. 

So What Can You Do?

Always bear in mind the following things that you can do to help avoid aggressive creditors:

  1. Ensure that you’ve read and responded to everything that you receive from the court and the collector’s attorney. 
  2. Show up for hearings – and be on time. 
  3. Know whether or not you are judgment proof.
  4. Ask for a hearing.
  5. Seek a qualified bankruptcy attorney.
  6. Speak with your attorney about the possibility of filing for bankruptcy.

Toronjo & Prosser Law Helps Those Who Are Dealing with Bankruptcy 

It’s undoubtedly stressful to realize that you don’t have enough money, and even more stressful when you realize that filing for bankruptcy may be your best option. That’s why it’s so important to consult with a knowledgeable and experienced Dallas bankruptcy attorney. At Toronjo & Prosser, our qualified Texas Bankruptcy Attorneys can help you to navigate the process. To learn more or to schedule a free consultation contact us online or call us today!