More than a third of all states now allow borrowers who don’t pay their bills to be jailed, even when debtor’s prisons have been explicitly banned by state constitutions. A report by the American Civil Liberties Union found that people were imprisoned even when the cost of doing so exceeded the amount of debt they owed.
Sean Matthews, a homeless New Orleans construction worker, was incarcerated for five months for $498 of legal debt, while his jail time cost the city six times that much. Some debtors are even forced to pay for their jail time themselves, adding to their financial troubles.
Stories of surprise arrests for unpaid debt have been reported in states including Indiana, Tennessee and Washington. In Kansas City, one man ended up in jail after missing only a furniture payment. The Federal Trade Commission received more than 140,000 complaints related to debt collection in 2010, and they’ve taken 10 debt collection agencies to court for their practices in the past three years.