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Have a look at these common statements or beliefs about debt and why this way of thinking could paralyze someone financially for a very long time. Fixed repayments also provide structure for those who tend to dwell on credit card debt. Locate your local credit cooperative. Interest paid on savings is usually much lower than the interest charged for borrowing, so repaying debts with all savings is a serious blessing.

New Bill Collector tactic: prison time

So if you have a debt that you have owed but cannot pay, a believer has the right to take you to court and make a judgement. When this happens to you, you should be aware  of a growing tendency used by some fundraisers to make you gamble - prison time.

Prison was an archeological instrument used by creditors to detain impoverished persons who had not repaid their debt. Borrower jails were frequently used in the United States until about the middle of the 18th century. Some of the signers of the Declaration of Independence had low credibility and spend some quality prison sentences in US debtors' jails.

From the mid-18th century, many states abolished detention of borrowers after the US administration banned detention for non-payment of debt at the state level. But some states - about a third - still use detention as a way of forcing borrowers to repay certain debt. Today you cannot go to jail because you have not paid a "civil debt" such as a bank account, mortgage or medical bill.

However, you may be compelled to go to imprisonment if you do not owe your tax or your children's allowance. United States Supreme Courts have banned the use of imprisonment to penalize needy offenders who neglect to foot the legal expenses and penalties as part of their punishment. Many state and municipal tribunals, however, circumvent this by considering charges, penalties and expenses as part of a civilian penalty or "criminal debt" or as a prerequisite for the person's being probated.

That way, if you don't repay those fine, you can go to county. But you shouldn't go to county because you didn't owe the state. In fact, national and state legislation, such as the Fair Debt Collection Practice Act (FDCPA), prohibits debt collecting agencies from prosecuting you for not paying a debt.

Yet there is a burgeoning tradition - especially in states like Ohio, Missouri, Minnesota, Illinois, Pennsylvania and more - of judgement holders using the judicial system to put borrowers in prison if they don't repay their debt. What can a debt collector do to get you in prison? You may be detained in civilian disdain in the courts if you are in a condition that allows you not to comply with a decision of a judge to appear for a trial or make a settlement.

When you are disregarded because you have not complied with an order, the courts may order the person to be detained (known as a capia or bodily fortification, according to the court). You' re gonna go to prison and stay there until you put up a loan. It is interesting to note that the amount of the loan is determined at a level that coincidentally corresponds to the amount of the judgement that the lender made against you.

From a technical point of view, this is not a debtor's penitentiary, because you will not go to imprisonment because you do not settle the debt, but because you do not comply with a judicial order. As soon as a believer has obtained a verdict against you, he can use the courts to persuade you to make payment. An example is a judgement holder who can have the courts order a levy of execution or a seizure order on your banking accounts.

In case an aggresive lender cannot find any incomes or property to grasp, he can submit documents to the courts requiring you to appear to examine a borrower. In the course of the debtor's audit, you take an affidavit to reply to the creditor's question on your financial situation. You' ll also have to tell me why you didn't pay that lender.

When you do not participate in the debtor's review, either because you did not get notification or just did not want to appear, the judge may find you in civilian disdain for not obeying his appearance. If you do not make payment, obey the instructions of the courts or take other measures to rectify what has occurred, you may be sentenced to prison.

Debtor's audits are a favorite debt collecting tool these days becuase believers can use the courthouse to take orders that you need to do something about (as distinct from orders that only impact his capacity to take your property). A creditor can do this severalfold. Indeed, many bondholders, especially sub-prime and payment day bondholders, repeat the same audit assignments, sometimes as often as once a month, in the hope that you slipped and did not appear for one of them.

In Illinois, for example, a new statute demands that the courts must notify you at least two times before they issue prison threat, and believers cannot repeat that they compel you to return to trial at the same hearings unless your finances have altered so that your responses to their question would be different.

Some things you can do to prevent a prison sentence in this situation: Don't disregard any communications or orders from the courts. Although you have the feeling that the believer "cannot get bread from a stone", you must take these communications and orders seriously. Although it looks like a complete flop, go to the hearing.

A believer will give up many often after a second or third attempt, when he realises that he really cannot move in with you. When you have difficulty settling invoices, please check our Debt Handling section for information on how to deal with high debts, negotiating with lenders and more.

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