When people first begin to face up to the reality that they may need to consider filing bankruptcy, they have one giant fear that sometimes they’re afraid to share even with me, their bankruptcy attorney. Maybe they heard or read something about debtors actually going to prison, and they are terrified that could happen to them if they can’t pay their credit card bills or other debts.
Well, on that count I can usually deliver very welcome news. As a consumer bankruptcy specialist in Indiana for almost twenty five years, and as one who actually helped write the bankruptcy exemption law in the state of Indiana, I can reassure you that the whole concept of debtor’s prison is antiquated, to say the least. In fact, according to my knowledge, debtor’s prisons were eliminated in the United States back in the early 1800’s.
The only people who end up serving time are the ones who purposely evade child support payments, who defraud citizens or the IRS, or who fail to appear at a court ordered hearing. I’ve written before about the fact that there are laws that protect debtors who have filed bankruptcy, in particular the Fair Debt Collection Practices Act. Once a person has filed bankruptcy, creditors are forbidden to continue collection efforts under the Bankruptcy Automatic Stay.
So, no, you probably don’t need to lose sleep imagining being behind bars. What is needed is a plan of attack. You and your bankruptcy attorney need to take a proactive approach to working through your debt situation and get you started on the “happily ever after” part of the story.