Many people that I talk to are tricked into paying money or making poor decisions because creditors threaten them. A popular practice among shady debt collectors is to lie to consumers by telling them they will go to jail or be arrested for not paying their debt. Payday loan creditors and debt collectors are especially aggressive with this tactic.
I often get calls from potential and active clients asking about threats they have received from debt collectors that “the sheriff will be sent out” or “you will be criminally charged” if you don’t pay your debt. In Wisconsin, such threats are empty and misleading. It is not a criminal offense to not pay your credit card or personal loan debt. Although a creditor has the right to sue and obtain a judgment against you for failing to pay a debt, such a proceeding is a civil matter rather than a criminal matter.
Additionally, there are some important aspects of civil suits to be aware of. First, once a creditor obtains a judgment against you, the next step for that creditor usually will be to try and garnish your income. The civil court will sometimes hold hearings or issue orders to determine whether you can be garnished or can have any of your property taken to pay the judgment. When a court issues an order requiring a response or appearance to disclose financial information, you can face consequences for not complying with orders of the court. In this situation, you are not being punished for failing to pay your debt. Rather, you are facing consequences for failing to respect a court order. By consequences, I am referring to the common practice of a court issuing a warrant. In this situation, an outstanding warrant could lead to your arrest, and usually an arrest will occur when/if you have an interaction with law enforcement, such as being pulled over for a traffic violation. The policy behind such action is to preserve the dignity of the court.
Thus, it is important to discuss your obligations with an experienced consumer attorney. An attorney can provide you with information about what you are required to respond to and what you are not required to respond to. Also, an attorney can give you information about the timelines involved in civil cases so you know how long you have to address your debt issues before facing garnishment warrants issued against you.