Debtors’ Prison Still Exist

Debtor’s Prison in Virginia. Credit jimmywayne

Debtors’ prisons still exist. What if you defaulted on your credit card payment and didn’t have the money to pay since you lost your job? This is a common occurrence in the west, but could you go to jail?

In, the U.S debtors’ prison no longer exists, but did you know that people around the world still go to prison for their debts? I found this shockingly true as I dug into the research for this article.

Debtors’ prison sounds like a tale out of an British Victorian era novel, yet it is a modern day reality. Debt both physically and virtually still holds millions in bondage.

Debtors’ Prison in the West

In England debtors prison was abolished with the Bankruptcy Act of 1896 and by the U.S. federal government in 1933. The states soon followed suite.

Before debtors’ prison was outlawed, debtors outnumbered violent criminals 5-1 with an estimated 50,000 debtors in jail in 1829 in the U.S. according to the Prison Discipline Society (source).

Recently there have been reported cases in the U.S. of a return of debtors’ prison, yet those people were arrested for a contempt of court or ignoring legal orders—NOT because of debt. You must respond to legal and court orders including child support, but you won’t be jailed (legally) for debt.

Modern Debtors’ Prisons Around the World

There are a few countries around the world that still imprison debtors.The most documented is that of the United Arab Emirates and Dubai in particular. Saudi Arabia also allows for jail for personal or corporate debt according to the British Embassy (see #8).

Hong Kong as recently as 1983 incarcerated 430 debtors, though I didn’t find information if this is still an ongoing policy. Rumors of debtors prison exist on China’s mainland, but again I wasn’t able to find reliable sources.

I am sure other countries exists that practice debtors’ prison, but this has been ignored by the western media or concealed by local governments.

A Virtual Debtors’ Prison

The United States doesn’t dole out jail time for debtors, yet millions are still held in the bondage of debt in a virtual debtors’ prison.

Debt is a virtual prison.

• It limits and restricts how you can spend your time and energy.
• It forces your money to be applied to areas you wouldn’t normally choose.
• Mortgage debt has trapped many in their homes from relocating since they are owe more than they have equity (underwater).
• Debt forces spouses to work, when they feel called to stay at home with their children.
• It traps people in jobs they hate in order to keep a reliable wage.
• Debt causes emotional, relational, and physical stress.
• Being in debt restricts your freedom.

It is time for a jail break–to break free from the bondage of debt. It is possible! If you’d like to begin your great escape start by reading my series How to Pay Off Debt or hire me as your personal finance coach.

Related posts: