One of the most common questions asked by bankruptcy clients is, “Can I go to jail if I can’t pay my debts?” The general answer is no, there are no debtors’ prisons. The federal judicial system abolished debtors’ prisons in 1833, and most states did the same during the 1830s and 1840s.
But that’s not exactly the whole story. A person can be jailed by a court for non-payment of many debts including unpaid taxes, court-ordered debts or fines, and non-support issues such as criminal non-support or owed child support. Additionally, a court can imprison a person to coerce compliance. Just ask H. Beatty Chadwick, the Pennsylvania lawyer who spent 14 years in jail for failing to comply with a court order.
Chadwick, now 73, was ordered to retrieve $2.5 million from an off-shore account and place it into a court-controlled account until his divorce was settled. He told the court that the money had been lost in a bad business deal, but the court did not believe him. Chadwick was ordered to jail for contempt of court until he produced the $2.5 million. Fourteen years later, in July of 2009, Chadwick was released when the last in a long series of judges (several who are now deceased) ruled that his continued imprisonment would be punitive instead of coercive. In other words, after 14 years it was obvious either Chadwick would not or could not pay up.
While debtors’ prisons are illegal, the threat of imprisonment still remains for some debt issues. It is important that anyone with serious debt problems to seek competent legal advice. It is equally important to provide honest information and documents to your attorney.