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Will Republicans Privatize Debtors' Prisons, Too?

The film "Inside Job" is a wonderful walk through the Wall Street meltdown and how bankers managed to make off with billions here and abroad while ordinary folks lost their jobs, their homes and their savings. If you haven't seen it, I highly

The film "Inside Job" is a wonderful walk through the Wall Street meltdown and how bankers managed to make off with billions here and abroad while ordinary folks lost their jobs, their homes and their savings. If you haven't seen it, I highly recommend it. You can watch it on Amazon on Demand or just get the DVD. Either way, it's really a must-see and a must-share film.

If you're not angry after you watch it, you should be. And if you're still not, I'm going to give you another reason to be. Debtors' prisons are making a comeback here in the United States, thanks to the Bush-era "bankruptcy reform", Republicans, and greedy corporations.

Wall Street Journal:

More than a third of all U.S. states allow borrowers who can't or won't pay to be jailed. Judges have signed off on more than 5,000 such warrants since the start of 2010 in nine counties with a total population of 13.6 million people, according to a tally by The Wall Street Journal of filings in those counties. Nationwide figures aren't known because many courts don't keep track of warrants by alleged offense. In interviews, 20 judges across the nation said the number of borrowers threatened with arrest in their courtrooms has surged since the financial crisis began.

Check out this snippet of David Walker, Pete Peterson lackey, talking about how we need to get back to meting out consequences for debt default, and specifically discussing debtors' prisons:

[h/t Naked Capitalism]

Can you guess the states enforcing these arrest laws? Here are just a few mentioned in 2010:

In Minnesota, which has some of the most creditor-friendly laws in the country, the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009, a Star Tribune analysis of state court data has found.

Not every warrant results in an arrest, but in Minnesota many debtors spend up to 48 hours in cells with criminals. Consumer attorneys say such arrests are increasing in many states, including Arkansas, Arizona and Washington, driven by a bad economy, high consumer debt and a growing industry that buys bad debts and employs every means available to collect.

[...]

In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January, a judge sentenced a Kenney, Ill., man "to indefinite incarceration" until he came up with $300 toward a lumber yard debt.

Back to the original WSJ article, here's another state:

In Florida, training this week for dozens of new judges and sitting judges who are moving to courts with the power to lock up borrowers includes a session about potential abuses of debt-related warrants. "Before we take away a person's freedom, we want to ensure that there are procedural safeguards," said Peter Evans, a Palm Beach County, Fla., state-court judge who proposed the session.

These warrants and court actions come about as debts are purchased by professional collection companies whose goal is to collect half the debt and fees. By the time they purchase the debt, the majority of it (especially in the case of credit cards) is accumulated late payment fees and usury-level interest rates. They dog consumers with phone calls and mail, and if they're unable to get a response, they go for the arrest warrants.

And just like with mortgages, there is sloppy paperwork strewn along the way. These collectors claim they've sent the debtor the proper notices, but that isn't always the case. For example, there's this guy:

In September 2009, Jeffrey Stearns, a concrete-company owner, answered a knock at the door from a Hancock County, Ind., deputy sheriff. The deputy was holding a warrant to arrest Mr. Stearns for not paying $4,024.88 owed to a unit of American International Group Inc. on a loan for his pickup truck.

After being handcuffed in front of his four children, Mr. Stearns, 29 years old, spent two nights in jail, where he said he was strip-searched and sprayed for lice. Court records show he was released after agreeing to pay $1,500 to the loan company. "I didn't even know I was being sued," he said, though he doesn't dispute owing the money. "It's the scariest thing that ever happened to me."

Mr. Stearns said he never got the summons or two orders to show up before a judge that a deputy sheriff said in court filings were delivered to him. Hancock County Sheriff Mark Shepherd couldn't be reached for comment. Mark Herr, an AIG spokesman, declined to comment on Mr. Stearns but said the lending unit was sold in November.

AIG. The company that was bailed out at taxpayers' expense after it played fast and loose with credit default swaps. That AIG. The same AIG that paid millions in bonuses. That one.

There is something incredibly evil underneath all of this. I am not saying that it's a good thing to walk away from debt, but it seems to me that in a time when people are barely clinging to the barest of necessities, when unemployment rages on without an end in sight and unemployment benefits are being cut by states, and when the banksters got off with not so much as a slap on the wrist and most of our savings, it's a really, really bad time to be throwing people in jail for an unpaid credit card which was probably issued with usury interest rates and fees that exceed the credit limit (which triggers yet more fees).

As to my original question in the title, it's not lost on me that Corrections Corporation of America (CCA) has operations in most of the states with laws allowing debtors to be jailed. After all, there's money to be made in them thar debts.

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