Debtor’s prison
6:07 pm
Fri March 25, 2011

Debtor’s proposal: no get out of jail free card

A follow up now to a story we brought you last fall on people who are sent to jail for failing to pay their debts, like a medical bill. A proposal moving through the legislature would toughen standards for debt collection agencies. It wouldn’t ban the practice of jailing people who owe money.

Last September, we introduced you to Janelle Leslie of Newport near Spokane. She described the night she called the police for help and ended up getting arrested for a warrant she didn’t know about.

“It was in front of family. It was in front of children. It was pretty hurtful. It was pretty embarrassing,” says Leslie.

Turns out Leslie, while living out of state, had missed a court date for an overdue medical bill that had gone to collection. State Representative Derek Stanford, a Seattle area Democrat, saw our story, reported in conjunction with independent journalist Harris Meyer, and drafted legislation to better protect consumers. Under the version that’s now passed the state House and is the state Senate, debt collection agencies would have to clearly state what debt they are collecting. Currently, the name of the original lender is sometimes not included in a notice from a collection agency. This is the scaled back version of Stanford’s original proposal and doesn’t’ go as far as he’d like.

“I’m absolutely committed to making sure that we’re not in position of having a modern day debtor’s prison. I think that we’re taking a good step here, but I think more work is needed,” says Stanford.

He says in the future he wants to outlaw the practice of collection agencies asking a judge to issue an arrest warrant for an overdue borrower who has missed court.