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Debtor's Prison - An Inadequate Attempt at Justice

April 13, 2012 | Comments: 0 | Views: 174

Imagine a world in which those who default on their personal loans aren't harassed with a constant barrage of phone calls. Their mail boxes aren't filled with stacks of collection letters. In this world there is no such thing as credit scores, financial history, or rating bureaus.

To many it sounds like a dream - but there's one caveat: there are still collection agencies in this world, but those agencies carry with them weapons and handcuffs, and don't bother with petty negotiations.

This imagined world isn't make-believe, but instead was our very own just over a century ago. Even more frightening, though, some states still have the authority to make this nightmare come to life.

Debtor's Prison Then and Now

In the 19th century and before, the nation's borrowers who fell delinquent on their personal loans weren't pestered until they repaid their debts. Rather they were hauled away to what was called debtor's prison. This jail was a place reserved exclusively for those who failed to repay their personal loans, and, for many, often carried sentences so lengthy that the dungeons claimed their lives.

These old prisons, originally referred to as "gaols," which is Old French for the word "cage" and is pronounced very much like the modern word "jail," served as little more than a vessel for vengeance rather than a productive deterrent or fix to the problem of personal loan delinquency and default.

Debtor's prison was abolished at the federal level in 1833, but some states have yet to follow that trend. In fact there are still six states that allow the imprisonment of those who fail to make good on their loans: Arkansas, Arizona, Illinois, Indiana, Minnesota, and Washington.

The Flaw in Debtor's Prison

Those six states fail to recognize the flaw in debtor's prison.

Prison is designed to enact retribution on an offender, and ultimately to benefit society. If a murderer is sent to prison, he is removed from society in order to protect the public from another atrocious offense. Similarly, if a rapist is sent to prison, he is held against his will for the benefit of other potential victims in our society. Likewise, thieves are sent to prison to protect everybody else from future repeat actions.

When debtors serve prison time, however, society doesn't receive any benefit at all. In fact, society is actually hurt by these peoples' time served.

The main problem with debtor's prison is that it has a negative effect on everybody-society included. Debtors are not criminals, but rather they are people who are trying to repay their personal loans. If they are sent to prison, they will not be able to work, and thus are doomed to never fulfill their obligation to their lender.

Lenders suffer since they will continue to be out their money as borrowers are forced into a position that prevents them from earning an income.

The debtor's family suffers since a former source of income goes missing, thus placing a domestic burden on the remaining members.

Finally, society as a whole suffers since another member of the work force is removed from the employment and tax pools.

It's important to make a distinction between thieves and debtors though. Many will argue that debtors are thieves since they borrowed and didn't repay money, thus stealing that money. If they trick, lie to, or try to evade lenders' attempts to reclaim money borrowed, then debtors certainly are thieves. But debtor's prison isn't for thieves - it's for anybody who cannot repay their debts.

Indeed, society needs to be protected from con men, but those putting forth an effort and struggling to repay personal loans are not a threat to society, and consequently do not deserve the punishment of imprisonment.

Debtor's prison, when used to incarcerate debtors and not thieves, achieves the exact opposite of what lawmakers intended the punishment to do. The federal government realized this in 1833, so it's a wonder why six states still hold onto an archaic method of punishment.

After covering the world of home mortgage loans for three years, the writer of this article, Alex Gomory, is proud to have expanded his scope to the entire financing industry as a whole. To further learn about personal loans and read more of Alex's articles and news stories, visit, where he and other staff writers continuously publish articles on a near daily basis.

Source: EzineArticles
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