By: Daniel Stone
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Can I go to jail for not paying my creditors?
I am sometimes asked by my new bankruptcy clients if they are going to jail for unpaid debts. Fortunately in the United States, unless you fail to pay some debts I will discuss in the next paragraph, we do not have debtors’ prisons in America. Can you imagine that? We would all be going to jail! Creditors have their form of relief in our judicial system but it is in the Civil Courts – not Criminal.
However, as discussed above, we all know of certain debts that we must pay or we could be in danger of going to jail. Examples are child support/alimony, tax debts (IRS/State), and contempt orders. In South Carolina, I want to alert readers that if there are ever served to appear before a Judge in a Supplemental Hearing, you have to attend this hearing. Failure to attend could land you in jail for being in Contempt. Please note that it would be your failure to attend the hearing that would land you in jail – not that you failed to pay a debt.
In South Carolina, the local county Sheriff often serves a letter on a debtor to call them after a creditor obtains a civil judgement. Many people calling me frantic about receiving a letter from the local Sheriff. Even in a case like this, you are not going to jail – but you do need to respond. Before calling the Sheriff, I recommend you speak to an attorney first to evaluate your assets.