Payday Lenders Get Consumers Tossed in Jail in St. Louis

Just when you though we were done with the foolishness of spending local government money to assist debt collectors, a loophole in Missouri allows creditors to have consumers tossed in jail.

Now don’t get too worried, this is happening because people are missing court dates. But consumers are also being setup for this as well.

The Bill of Rights in the Missouri constitution declares that “no person shall be imprisoned for debt, except for nonpayment of fines and penalties imposed by law.”

Here is the plot of the setup. A consumer falls behind on a debt. The creditor sues and wins a judgment against the consumer. Then the creditor asks the court to schedule a hearing to examine the debtors assets and bank accounts. Guess what? The consumer doesn’t show. Just like most don’t show when they first got sued. It’s estimated that 90+ percent don’t show for a variety of reasons, the most prevalent being fear over the proceeding.

So when the consumer does not show for the examination hearing they then ask the court for a “body attachment” to arrest and hold the debtor for a court hearing.

If the debtor is arrested, their bond is typically set at the amount they owe and they have to pay the entire amount to get out of jail.

The distinction that needs to be made is the consumer is not being arrested for the debt, but for failing to appear in court. Regardless, the outcome is potentially the same.

While the practice is happening more often, an examination of records showed one attorney had asked for 55 examinations of debtors that led to 23 body attachments and resulted in seven arrests. – Source

But a new ruling out of the Missouri Supreme Court may help to stop this practice. According to a recent ruling by the high court.

“The case involved David and Glennette Nothum, who were sued by Arizona Bank and Trust. The Nothums were represented by St. Louis attorney Norm Pressman.

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The bank got a judgment against the couple, and demanded that the Nothums reveal their assets in St. Louis County Circuit Court.

The Nothums took the Fifth. As often happens, the bank got a letter from the circuit attorney promising not to prosecute them for what they say in court – granting the Nothums “use immunity.” Such letters are pretty common in debt cases.

A Missouri law specifically allows that sort of immunity for debtors examinations, and the circuit judge ordered the couple to tell all.

But the Supreme Court overruled the circuit court in a decision at the end of July. The immunity statute for debtors exams only protects them from prosecutors’ use of their testimony directly as evidence against them in a criminal case. It doesn’t prevent the prosecution from using the testimony as a road map to find other evidence against them based on the same facts.

To compel testimony, the grant of immunity must include both their words and information derived from their words, the court said.” – Source


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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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