Consumer Law

Indiana closes debtors' prison

By Alan White

A while back I reported on the revival of debtor's prison in a southern Indiana county court.  The Indiana Court of Appeals has now struck down the local county court rule that imposed contempt sanctions, including imprisonment, for debtors who failed to pay small claims judgments on ordinary civil debts.  The county court rule provided for a "personal order of garnishment,"  which, unlike ordinary garnishment orders directed at third parties like banks and employers, would order the debtor herself to turn over any non-exempt funds in the debtor's possession, regardless of whether such funds actually existed.  The disabled and indigent defendant in the case at issue was found in contempt and ordered to serve 30 days in jail for failing to pay $10 monthly on a $445 judgment, despite not having any non-exempt assets or income.

The Court of Appeals cited the Indiana Constitution's provision that "there shall be no imprisonment for debt, except in case of fraud, " and voided the local court procedures.  Congratulations to John Brengle and Katherine Rybak of Indiana Legal Services on achieving simple justice in this case.

Full post as published by CL&P Blog on December 01, 2010 (boomark / email).