Although Debtors Prison was a reality in the United States a couple hundred years ago, and still exists in other countries, you cannot go to jail or prison, or even be lawfully arrested, merely for owing a debt.  It does not matter whether it is a $100 debt to a friend or a $1 million business debt.  Although the police often get called for such things, they will almost never get involved and they tell the creditor it is a civil matter.  Unfortunately, many unscrupulous lenders will lie and threaten people with arrest if the debt is not paid immediately or in the near future.  I just read about one person who received a call from the alleged collection agency who told her they were actually in the Judge’s office and he was going to sign a warrant for her arrest if the debt was not paid over the phone immediately.  Collectors are violating the law by making any threats of arrest!  In addition, if you get a call like this the chances are also high that it is an outright criminal scam to get you to give the criminals your credit card, debit card or bank account numbers.  Never, never, ever give your card or account numbers to any collector (or person who claims to be a collector or creditor) over the phone!!

I need to add a caveat to the statement that you cannot go to jail merely because you owe a debt.  You can face jail for other legal issues related to not paying debts.  In most states, you can be jailed for not supporting your children (which, effectively, is contempt of court for not paying child support).   You can face civil and criminal penalties for writing a bad check (intentionally or unintentionally) and not taking care of it immediately.  If a party gets a judgments against you and serves post-judgment discovery, you can go to jail for continued refusal to respond to the requests.  In Georgia, it is a crime to hide collateral or take other steps to prevent a secured creditor from getting its collateral.  Other states may have criminal penalties that are related to not paying certain debts.  Importantly, in each of these cases people do not simply get carted off to jail because they owe money.  For child support and failure to respond to discovery, for example, there are usually at least a couple clear warnings from the Judge before they reach that step.  In Georgia, a creditor is required to give you notice and an opportunity to make good on a bad check before they seek a criminal warrant.

The bottom line is that you will not go to jail for owing on loans, credit cards, home or auto deficiencies, and so on.  If you do get threatened with arrest, make sure you keep notes about the call and threat, the number on your caller ID, date, time and any names you are given for the creditor or collector.  Then call a local Bankruptcy or collection defense lawyer to discuss whether this is even a legitimate collection call or a scam, and whether any action needs to be taken on your part.