The following is provided for informational purposes only and is not legal advice. Consult with a qualified legal professional for questions specific to your unique situation.
If you’re dealing with credit card debt that you can’t manage, you might be getting phone calls from collection agencies. And those debt collectors may be using aggressive tacticsto scare you into paying, including threatening jail time. But can you really go to jail over credit card debt?
Will I Go to Jail For Unpaid Debt & Does it Vary By State?
So can you go to jail for credit card debt? And does it differ by state? The short answer is no. The Fair Debt Collection Practice Act prohibits debt collectors from threatening you with criminal prosecution and jail time. However, that doesn’t mean you can’t go to jail.
Even though you can’t be charged with a criminal act for not paying your debts, debt collectors can take you to civil court and get a judgment in their favor. This judgment means that you must pay your debt as agreed or have your wages garnished until it’s paid.
Here’s where things can get messy – especially depending on the state that you live in and how litigious your creditor may be. If you miss a payment or fail to follow the steps outlined in the judgment, you could be held in contempt of court, which potentially could end with you being sent to jail. Following arrest, you would remain in jail until you can post bond, which is often the same amount as the judgment against you.
Read more: Why You Can't Afford to Ignore Unpaid Debts
Always Follow All Court Orders
See the difference? There are no longer any debtor’s prisons in the United States – you can’t go to jail for simply failing to make payment on a civil debt (credit cards and loans). You can, however, be taken to court and – assuming you lose – find yourself stuck with a civil judgment ordering you to pay your debt (usually through a wage garnishment). If you don’t fulfill the requirements of the judgment, you could possibly be arrested for violating the court order and end up in jail.
Fortunately, this type of action is rare and requires both an aggressive creditor and a willing court, which won’t be the case most of the time.
Civil cases also usually take a while to work through the system, which may give you time to make payment arrangements with debt collectors...outside of a courtroom. If you can settle the debt or make an ongoing arrangement without a civil judgment, then the risk of going to jail disappears. If you miss a payment, you can simply contact the debt collector to work out when you’ll be able to make it up without fear of an arrest warrant being issued.
You're More Likely to Go to Jail for Unpaid Child Support or Delinquent Taxes
While it’s fairly unlikely that unpaid credit card debt will ever land you in jail, unpaid taxes and child support are another matter entirely. Failing to pay your taxes is a crime and if you’re prosecuted you could very much end up in jail. If you’ve been ordered by a court to pay child support and fail to do so, you may be found in contempt of court and sentenced to serve jail time.
In all cases, it’s always best to try and work out a compromise with any agency or individual that you owe money to. Once it goes to court and a judgment is ordered against you, things only get more complicated and difficult to manage. Deal with it before it gets to that point and you won’t have to worry about jail time.
The bottom line is this: you can’t go to jail simply for falling behind on your credit card debt, but you could go to jail if you have a judgment filed against you and you don’t follow the court order. Avoid the situation altogether by dealing with your debt collectors before they take you to court.
If you’re worried about your debt situation, you should speak with a nonprofit financial counselor immediately. Counseling is free, confidential, and available 24/7. A trained counselor can help you understand your options and get you started down the right path for your goals.
FAQs
Can You Be Imprisoned For Credit Card Debt? The short answer is NO. Debtors' prisons, as they were called in the past, no longer exist.
Can you be jailed for not paying credit card debt? ›
Can I go to jail if I don't pay my credit card debt? NO. You cannot go to jail simply for failing to pay your credit card debt. It is also illegal for creditors or debt collectors to threaten you with arrest or any kind of criminal penalty to try to get you to pay.
What is the penalty for not paying credit card debt? ›
If you fall more than 60 days behind on your credit card payment, the creditor can increase your APR. When this happens, you'll be charged a higher interest rate on your balance and on future purchases. In some cases, you might have an opportunity to work with the creditor and undo this damage.
Can I just ignore my credit card debt? ›
The other risk you take by ignoring your debt is that your creditor — or a third-party collection agency that has taken over your debt — could sue you for the amount you owe, plus interest and penalties. There's a time limit on when they can do that too, but it varies depending on the state you live in.
Can unpaid credit cards take you to court? ›
If you default on your credit card debt and are unable or unwilling to work out an arrangement with your credit card company, you risk being on the receiving end of a debt collection lawsuit. Getting sued by a creditor or collection agency can be an unsettling experience, especially if you don't know what to expect.
What happens when a credit card company sues you and you have no money? ›
If you are unable to pay your debts or reach some settlement on them, you may benefit from bankruptcy. Depending on your assets and income, bankruptcy can either cancel (discharge) your debts, or allow you to create a partial repayment plan and discharge your debts at the end of the plan.
What happens if credit card debt is never paid? ›
Your lender will contact you to demand the missing payments are made. Then if you don't make the payments they ask for, the account will default. And if you still don't pay, further action may be taken, such as employing debt collection agents to recover the money you owe them.
How can I legally avoid paying credit card debt? ›
If you want to know how to stop paying credit cards legally, that could be tackled with debt settlement programs or filing for bankruptcy. Some of these options can help you get much-needed temporary financial relief. Still, there are drawbacks to consider, including the risk of being sued or selling assets.
How to get rid of credit card debt without paying? ›
Bankruptcy is your best option for getting rid of debt without paying.
What happens if you never pay your credit card bill? ›
The bank will block your credit card in order to prevent any further transactions from the card. You will not be able to swipe the card for making any purchases. Until all the dues are settled and the bank is convinced, the card cannot be used again.
If you continue to ignore communicating with the debt collector, they will likely file a collections lawsuit against you in court. If you are served with a lawsuit and ignore this court filing, the debt collection company will be able to get a default judgment against you.
What's the worst a debt collector can do? ›
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
How often do credit card companies sue for non-payment? ›
Summary: On average, credit card companies sue for non-payment in 1 out of 7 cases, or about 14.5% of the time.
What happens if you go to jail with credit card debt? ›
The short answer is NO. Debtors' prisons, as they were called in the past, no longer exist. According to the Fair Debt Collection Practices Act, collectors are prohibited from threatening prosecution or jail for credit card debt. So, this is a credit scam.
Which credit card companies sue the most? ›
It is important to note that Capital One has the highest number of subprime borrowers of any lender in the U.S. This combined with the finding that it also files the most lawsuits means that some of the most vulnerable and financially-strapped people can find themselves feeling kicked when they're already down.
How likely is it that a collection agency will sue? ›
How likely is it that you will be sued for a debt? According to one Consumer Financial Protection Bureau report, 1 in 7 — or about 15% — of consumers contacted about a debt in collections were sued. But the likelihood of a debt collection lawsuit depends on several factors.
Will I get sued if I stop paying my credit cards? ›
Yes, a credit card company can sue you if you stop paying your bills.
What happens to unpaid credit card debt after 7 years? ›
Most negative items should automatically fall off your credit reports seven years from the date of your first missed payment, at which point your credit score may start rising. But if you are otherwise using credit responsibly, your score may rebound to its starting point within three months to six years.
