The following is provided for informational purposes only and is not legal advice. Consult with a qualified legal professional for questions specific to your unique situation.
If you’re dealing with credit card debt that you can’t manage, you might be getting phone calls from collection agencies. And those debt collectors may be using aggressive tacticsto scare you into paying, including threatening jail time. But can you really go to jail over credit card debt?
Will I Go to Jail For Unpaid Debt & Does it Vary By State?
So can you go to jail for credit card debt? And does it differ by state? The short answer is no. The Fair Debt Collection Practice Act prohibits debt collectors from threatening you with criminal prosecution and jail time. However, that doesn’t mean you can’t go to jail.
Even though you can’t be charged with a criminal act for not paying your debts, debt collectors can take you to civil court and get a judgment in their favor. This judgment means that you must pay your debt as agreed or have your wages garnished until it’s paid.
Here’s where things can get messy – especially depending on the state that you live in and how litigious your creditor may be. If you miss a payment or fail to follow the steps outlined in the judgment, you could be held in contempt of court, which potentially could end with you being sent to jail. Following arrest, you would remain in jail until you can post bond, which is often the same amount as the judgment against you.
Read more: Why You Can't Afford to Ignore Unpaid Debts
Always Follow All Court Orders
See the difference? There are no longer any debtor’s prisons in the United States – you can’t go to jail for simply failing to make payment on a civil debt (credit cards and loans). You can, however, be taken to court and – assuming you lose – find yourself stuck with a civil judgment ordering you to pay your debt (usually through a wage garnishment). If you don’t fulfill the requirements of the judgment, you could possibly be arrested for violating the court order and end up in jail.
Fortunately, this type of action is rare and requires both an aggressive creditor and a willing court, which won’t be the case most of the time.
Civil cases also usually take a while to work through the system, which may give you time to make payment arrangements with debt collectors...outside of a courtroom. If you can settle the debt or make an ongoing arrangement without a civil judgment, then the risk of going to jail disappears. If you miss a payment, you can simply contact the debt collector to work out when you’ll be able to make it up without fear of an arrest warrant being issued.
You're More Likely to Go to Jail for Unpaid Child Support or Delinquent Taxes
While it’s fairly unlikely that unpaid credit card debt will ever land you in jail, unpaid taxes and child support are another matter entirely. Failing to pay your taxes is a crime and if you’re prosecuted you could very much end up in jail. If you’ve been ordered by a court to pay child support and fail to do so, you may be found in contempt of court and sentenced to serve jail time.
In all cases, it’s always best to try and work out a compromise with any agency or individual that you owe money to. Once it goes to court and a judgment is ordered against you, things only get more complicated and difficult to manage. Deal with it before it gets to that point and you won’t have to worry about jail time.
The bottom line is this: you can’t go to jail simply for falling behind on your credit card debt, but you could go to jail if you have a judgment filed against you and you don’t follow the court order. Avoid the situation altogether by dealing with your debt collectors before they take you to court.
If you’re worried about your debt situation, you should speak with a nonprofit financial counselor immediately. Counseling is free, confidential, and available 24/7. A trained counselor can help you understand your options and get you started down the right path for your goals.
FAQs
Can You Be Imprisoned For Credit Card Debt? The short answer is NO. Debtors' prisons, as they were called in the past, no longer exist. According to the Fair Debt Collection Practices Act, collectors are prohibited from threatening prosecution or jail for credit card debt.
Can you be jailed for not paying credit card debt? ›
Can I go to jail if I don't pay my credit card debt? NO. You cannot go to jail simply for failing to pay your credit card debt. It is also illegal for creditors or debt collectors to threaten you with arrest or any kind of criminal penalty to try to get you to pay.
What is the penalty for not paying credit card debt? ›
Penalties for missing a payment include negative marks on your credit history, late fees, the loss of promotional interest rates or rewards and increased interest rates. Even a recently missed payment on credit card debt can result in a call from a collections agency.
Can I just ignore my credit card debt? ›
Your lender will contact you to demand the missing payments are made. Then if you don't make the payments they ask for, the account will default. And if you still don't pay, further action may be taken, such as employing debt collection agents to recover the money you owe them.
Can unpaid credit cards take you to court? ›
If you default on your credit card debt and are unable or unwilling to work out an arrangement with your credit card company, you risk being on the receiving end of a debt collection lawsuit. Getting sued by a creditor or collection agency can be an unsettling experience, especially if you don't know what to expect.
What happens when a credit card company sues you and you have no money? ›
You may lose the ability to dispute the debt, if you believe you don't owe it or that the amount is wrong, and depending on your situation and your state's laws, the creditor may be able to: Garnish your wages. Place a lien against your property. Move to freeze funds in your bank account.
What happens if you never pay collections? ›
If you don't pay, the collection agency can sue you to try to collect the debt. If successful, the court may grant them the authority to garnish your wages or bank account or place a lien on your property. You can defend yourself in a debt collection lawsuit or file bankruptcy to stop collection actions.
How to get rid of credit card debt without paying? ›
Bankruptcy is your best option for getting rid of debt without paying.
How often do credit card companies sue for non-payment? ›
George graduated from BYU Law school in 2020 with a JD/MBA. In his spare time, George likes to cook, because he likes to eat. Summary: On average, credit card companies sue for non-payment in 1 out of 7 cases, or about 14.5% of the time.
How long before credit card debt is uncollectible? ›
Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt. State where you live.
Can a debt collector access my bank account? Yes, a debt collector can take money that you owe them directly from your bank account, but they have to win a lawsuit first. This is known as garnishing. The debt collector would warn you before they begin a lawsuit.
What will happen if I don't pay my credit card bill? ›
If you continue to miss payments, the credit card company may assign collection agencies to recover the debt, leading to stressful harassment. In extreme cases of prolonged nonpayment, the company may file a lawsuit against you, resulting in wage garnishment or property liens.
How likely is it that a collection agency will sue? ›
How likely is it that you will be sued for a debt? According to one Consumer Financial Protection Bureau report, 1 in 7 — or about 15% — of consumers contacted about a debt in collections were sued. But the likelihood of a debt collection lawsuit depends on several factors.
How to answer a summons for credit card debt? ›
How To Answer a California Court Summons for Debt Collection
- Step 1: Get an Answer Form. ...
- Step 2: Fill Out the Answer Form. ...
- Step 3: Assert Your Affirmative Defenses & Request to the Court. ...
- Step 4: Deliver a Copy of Your Answer to the Plaintiff. ...
- Step 5: File Your Answer Form and Pay the Filing Fee (or Request a Fee Waiver)
To obtain a judgment, the credit card company must first file a lawsuit against you in a civil court. The creditor's attorney will file a document called a "complaint" and deliver the complaint to you. This delivery is called "service," ensuring you get notice of the lawsuit.
What happens to unpaid credit card debt after 7 years? ›
After seven years, unpaid credit card debt falls off your credit report. The debt doesn't vanish completely, but it'll no longer impact your credit score. MoneyLion offers a service to help you find personal loan offers based on the info you provide, you can get matched with offers for up to $50,000 from top providers.
Why should you never pay a collection agency? ›
A collection account can significantly damage your credit score, but the impact lessens over time. Paying off a collection might not immediately improve your credit score, but some newer credit scoring models give less weight to paid collections.
