Debt Settlement

Will I go to jail (in California) if I don’t pay my debts? What about if I file bankruptcy?

NO!  You will not go to jail if you do not pay your debts.  And you will not go to jail if you file bankruptcy. Prior to the mid 19th century debtors’ prisons were a common way to deal with unpaid debt. In 1833 the United States abolished Federal imprisonment for unpaid debts, and most states outlawed the practice around the same time.

Six states (Arkansas, Arizona, Illinois, Indiana, Minnesota, and Washington) allow debt collectors to seek arrest warrants for debtors in default if all other collection methods have failed.  In California, a bench warrant may be issued if the debtor fails to appear for an Order for Examination (“OEX”).  An OEX is a method creditors may use to enforce a judgment.  To have an OEX issued, the person you owe money must have already obtained a judgment which means you should have had notice of the lawsuit.  It is not, however, uncommon to not have notice.

The OEX is an order signed by a judge ordering the judgment debtor to appear to answer questions concerning their finances (assets, debts, income, and expenses).  If the judgment debtor fails to appear, the judge may hold the judgment debtor in contempt of court and issue a bench warrant.  It is the contempt of court for failing to obey a court order (“you must appear in court on such and such date”) which forms the basis of the bench warrant not the underlying debt.

Modesto bankruptcy attorney Brian Haddix can explain exactly how creditors may enforce their judgments against you and advise you as to your options on how to deal with your creditors.  Attorney Brian Haddix offers creditor and debtor services including debt settlement, debt litigation, and Chapter 7 and Chapter 13 bankruptcy.

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