Posted on Thursday, June 24th, 2010 at 12:10 pm
Author: Renee Martin
The term ‘debtors’ prison’ immediately conjures images of the mid-nineteenth century, when both men and women were locked in prisons until their families could afford to pay off their debt. For some, it will bring up images of a city like Dubai, where a form of debtors prison exists today. Overall, the idea of being arrested because of debt — or having your property seized –is quite unfathomable to most Americans, and yet it is happening around the world on a daily basis.
The Minneapolis Star Tribune recently printed a great investigative piece in which they documented this phenomenon.
It seems that debt is being sold to collection companies for pennies on the dollar, who then go to extreme measures to collect. In many cases, this debt is several years old. Essentially what happens is that a company tries to contact the debtor and after several failed attempts, they get a summons for the person to appear in court. If the person does not appear in court, a warrant is issued for their arrest. At this point, the law then aids the company by arresting and jailing said debtor at the tax payer’s expense.
Warrants are acted upon in jurisdictions where law enforcement can spare the manpower to act upon them. There is clearly collusion between law enforcement and these companies, because judges have reportedly set bail in the amount of money owed.
Apparently, incidents of individuals being arrested for debt are on the rise and it is hardly surprising given the state of the global economy. In many cases, people do not recognize the name of the pursuing company and are less likely to respond to collection attempts, because it is not the same business by which they were originally indebted. According to the Star Tribune, people are most often not even aware that an arrest warrant has been issued in their name.
That this is even happening is yet more proof of the irrationality of the capitalist system. The poor are specifically marketed high-interest loans that are beyond their ability to pay.
Usury is a common place practice today and this amounts to legalized loan sharking. It costs more money to be impoverished and those that can least afford it are forced to maintain their lower-rung class position because of the punitive measures enacted by the ruling classes. The United States runs on debt and credit even though it is suggested that the issue is people living beyond their means. Credit card companies continue to make billions of dollars in profit each year while attempting to reduce the ability to declare bankruptcy. Imprisoning people for debt is simply an escalation of predatory tactics.
The state has become complicit in many areas rather than protecting its most vulnerable citizens. Gone is the concept that increasing the living standard of the poor amounts to a more prosperous nation because the ruling class seeks to increase the gap between the poor and the wealthy further with each passing year.
Much like the imprisonment of debtors, the seizure of property for the inability to pay small tax debts is not receiving ongoing national attention, because we have become focused on those that have been caught in mortgage crises. The Huffington Post reports that small tax debts, such as water bills, are being sold by the city to ease the pinch of budget short falls. The collector will then add interest and fees to the original debt. When the debtor cannot afford to pay the bill, they are evicted from their home (note: this occurs even in situations where the house is mortgage-free). The tax collector is then able to pick up property for a ridiculously low price, which gives the company the ability to hold onto the property until it can be sold in a real estate boom. According to The Huffington Post, the local sheriff actively takes part in the foreclosure, meaning that once again the government is financing the further impoverishment of the poor for the profit of a corporation.
We have been conditioned to express moral indignation at people who cannot pay their debts. We are taught to attribute the situation to a lack of financial responsibility rather than to a system that has been rigged for failure. Real wages have not kept up with the cost of living and this is specifically why so many Americans are caught up in the cycle of debt. Unlike the fantasy that creditors are selling the public, people are now financing basic living expenses like food and rent, yet the image of the irresponsible consumer abounds.
The state is not benefiting from imprisoning people or foreclosing on homes. When a person is arrested, the state pays the full rate of incarceration which includes: food, clothing, shelter and the price of those employed to stand guard over the person — and the company reaps the profits. When a home is foreclosed upon, the state makes an initial profit from the collection of the debt, but it is then forced to pay the salary of the sheriff who participates in the foreclosure, plus the cost of the new social services that the debtor then must rely on for shelter.
In many of these cases, the debt is for an insignificant amount of money. Anyone who has ever been in serious debt would tell you that they would much rather pay what they owe than to be hounded by collection agencies, never mind these escalated tactics. Companies, in collusion with the government and employers, create the circumstances under which people are saddled with spurious debt, yet when customers are unable to pay, these very same companies act as though they have been victimized. The current handling of credit amounts to nothing more than a war against the poor.
And when we consider that those that are impoverished are most likely to be dealing with at least one other area of marginalization, how can this be seen as anything other than a very specific attempt to ensure a coercive method of social hierarchy? It doesn’t benefit a nation – it benefits the small percentage who that believe they deserve a life of lavishness and luxury.
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