Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
The fear of going to jail for credit card debt is a common concern, but in the United States, debtors' prisons were abolished long ago, meaning you cannot be jailed solely for unpaid credit card debt. However, the consequences of failing to pay your debt can still be serious, including damaged credit, wage garnishments, and lawsuits. Learn more on what happens if you don’t repay your credit card debts, what types of debts you can go to jail for, and how to manage your credit card debt so you can avoid any consequences.
What Happens if You Don’t Repay Your Credit Card Debts?
When you sign up for a credit card, you agree to repay the charges you make, plus any applicable interest and fees. If you fail to make those agreed-upon payments, your account will become a delinquent credit card account. Your account is considered delinquent if you don’t make your payment by the due date. Oftentimes, you’ll be charged a late fee after about 10 days, which will be added to the amount you already owe. At this point, you may want to reach out to the credit card issuer about negotiating credit card debt and inquire about credit card debt forgiveness.However, if after a full billing cycle, you still haven’t made a payment, the credit card company will typically report you as delinquent to the three major credit bureaus. Consequently, your failure to pay will be indicated on your credit reports, which will damage your credit score. A delinquency can remain on your credit report for years. The card issuer will contact you to attempt to get you to make payments. If you don’t pay, they will eventually sell the debt to a collector. The collector will likely be more persistent, taking every legal action to get you to pay. If you still refuse to pay your debt, the debt collector will likely file a civil lawsuit against you. If that happens, you will receive a summons to appear in court and you will have the opportunity to present your case in front of a judge. If you fail to appear in court, you could be jailed for that offense.If the judge rules against you, there will be a civil judgment issued stating that you owe the debt collector money. If you don’t pay the judgment, the debt collector could petition the court to garnish your wages or seize your property, depending on the laws of the state you live in. And in the most extreme cases, it is possible to be jailed for failing to obey a court order, which is technically different from going to jail for credit card debt.
What Can Credit Card Debt Collectors Do?
Debt collectors have several tools available to attempt to get debtors to pay, but their actions are limited by law. For example, they can contact you by phone, email, postal mail, text messages, and via social media. After reaching you, they have five days to send you documentation about the name of the creditor and how much you owe, and give you a chance to contest the debt. Under the Fair Debt Collection Practices Act (FDCPA), debt collectors aren’t allowed to lie to or harass you. They are prohibited from making false claims and threats, like having you arrested or jailed. They cannot contact you before 8 a.m or after 9 p.m. without your permission. And if you ask them to stop contacting you, they must stop (you will need to inform them of this in writing). They are also prohibited from telling anyone other than your spouse about the debt.
What Kind of Debts Can You Go to Jail For?
While you cannot go to jail for failing to pay your credit card bill, there are a few debts that you can go to jail for.
Child Support
In some states, you can go to jail for failing to pay child support. This can be for a civil violation or, more rarely, for criminal contempt of court.
Delinquent Taxes
Not paying your taxes is a crime, and those who are convicted could be sentenced to prison.
Contempt of a Court Order
While you cannot be jailed for failing to pay credit card debt, you could be sent to jail for violating a court order to pay the debt.Recommended: Guide to Debt Management Plans
How to Avoid Aggressive Debt Collection Efforts
There are several things that you can do to protect yourself from aggressive debt collectors.
Review Your Rights Under the FDCPA
You should familiarize yourself with and know your rights under the federal Fair Debt Collection Practices Act. According to the FDCPA, debt collectors can’t use abusive or harassing techniques, such as threatening to send you to jail.
Check Local and State Debt Collection Laws
Beyond the federal law, your state or city may have its own laws restricting what debt collectors can do. For example, Ohio gives debtors 28 days to answer or respond to a complaint by creditors. If a debtor does not file an answer, or if they ignore a legal summons and complaint or fail to appear in court, creditors can win the case by default and receive a judgment against the debtor. Learn about the laws in your area.Recommended: What Are Debt Settlements?
Read and Respond to Legal Papers or Messages
Do not ignore any documents or lawsuits from a court or the collector’s attorney. Failing to respond to a lawsuit or legal action could result in a default against you. At this point, you may want to consider hiring an attorney to help you.
File for Bankruptcy
If you can’t repay your outstanding debts, as a last resort, you could consider filing for bankruptcy. However, filing for bankruptcy will stay on your credit report for seven years (or longer) and will make it difficult to borrow money in the future. The consequences are serious, and you should only consider bankruptcy in consultation with an attorney.
Managing Your Credit Card Debt
Paying off credit card debt can help you avoid debt collectors as well as the negative consequences discussed above. Consider reaching out to a non-profit credit counselor for assistance. They can help you create a plan to manage your debt and pay it back. There are also strategies for reducing credit card debt, such as creating a budget and controlling your spending. You can also check into credit card consolidation strategies, which can be helpful if you have several credit cards to pay off. Combining them into a single account may make your debt easier to manage.
The Takeaway
While you can’t go to jail for failing to pay your credit card debt, there are serious consequences for outstanding debts that could impact your credit for years. In extreme cases, you could potentially face a civil lawsuit. If you’re having trouble paying off your credit card debt, contact your credit card company before your account becomes delinquent to try to work out a repayment plan. If you’re considering credit card consolidation, Lantern by SoFi can help. Our marketplace makes comparing credit cards convenient by allowing you to see various offers all in one place.
Frequently Asked Questions
Can you go to jail for student loan debt?
What happens after 7 years of not paying debt?
Is credit card debt ever forgiven?
Can credit card companies garnish your bank account?
Photo credit: iStock/AsiaVision
LNTCC-Q324-005
About the Author
Jason Steele
Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
