Is jailing debtors the same as debtors jail?

6-10-2010 Indiana:

Some legal experts say the practice violates state constitutional bans on debtors prisons.

Herman Button listened in stunned silence as a judge in Perry County, Ind., threatened him with jail time unless he agreed to pay $25 a month toward an eight-year-old housing debt.

Unemployed and living on a disability check, Button decided to fight back after the January 2009 hearing. He and an attorney from Indiana Legal Services appealed, citing the Indiana Constitution's Bill of Rights, which says "there shall be no imprisonment for debt, except in case of fraud."

To Button's surprise, a state Appeals Court judge agreed. "I'm no lawyer, but I knew we abolished debtors prisons in this country a very long time ago," said Button, 50, who now lives in Hawesville, Ky.

The Button case highlights a potential pitfall for creditors that use the law enforcement system to collect old debts. Most state constitutions, including Minnesota's, have clauses dating to the 1850s that expressly prohibit the jailing of people for their debts. As legal actions against debtors intensify, attorneys are taking a fresh look at these clauses.

"We have created a de facto debtors prison system in the United States that is largely unconstitutional," said Judith Fox, a law professor at Notre Dame Law School. "In some parts of the country, people are so fearful of arrest they are scrambling to pay money they might not even owe."

In states such as Indiana and Illinois, people are being locked up for not making court-ordered payments. Known as "pay or stay," it can mean days in jail and multiple arrests for the same debt. Some legal experts say the practice is unconstitutional because the arrest is directly linked to the failure to pay a debt.

In Minnesota, the issue is less clear because warrants to arrest debtors are issued for disobeying court orders, such as not filling out a financial disclosure form and missing a required hearing, not for failure to pay debt. So long as someone fulfills the court order, they can avoid incarceration. ..Source.. CHRIS SERRES, Star Tribune