Myths abound when it comes to what creditors may do when it comes to collecting their debt. For sure, there are documented stories of creditor abuse – but those stories are just that, abuse and possible flagrant violations of law. I was recently retained by a client to file bankruptcy. One reason, the client told me, that she decided to move forward with filing for bankruptcy is that a close relative warned her that there is a possibility of being arrested for failing to pay the outstanding credit card debt.
The short answer is that, no, here in NY you generally cannot be arrested for owing outstanding debt. The concept of a ‘debtor’s prison’ was abolished a long time ago here and across the country. A creditor may sue you based on an alleged debt, and obtain a judgment. To enforce that judgment, the creditor has to send paperwork to a marshal or sheriff for execution (which is usually in the form of a wage garnishment or bank account freeze). Although the marshal or sheriff are law enforcement personnel, they cannot arrest a person for most kinds of debt, including credit card or medical debt.
This answer, however, has some exceptions. There is some authority for someone to be arrested for failure to pay domestic support obligations, such as child support. Further, if a court finds a debtor in contempt for some reason, the court may issue an order seeking the arrest of a debtor (perhaps in a tax fraud case).
For most people, however, that are dealing with credit card, cell phone and medical debt, you can take a deep breath. You will not be arrested for failing to pay these debts. Although you may receive a notice from a marshal or sheriff, that’s likely a notice to advise that they will be executing on a judgment that was obtained by the creditor. While you should not want to wait until the absolute last second to file for bankruptcy to ward off a judgment execution (because you may be limited in how much bankruptcy planning you can do), know that the filing of a bankruptcy will stay (under most circumstances) the enforcement of a judgment.