Credit card debt, can you go to jail?

Question

My son had a laptop put on a credit card that he got. Then lost his job and has not been able to pay it. They called and told him they were filing a lawsuit for "fraud against a federal inst." Told him he has until 4 today to come up with $4,000.00 or they will file the charges. Can they and will he go to jail if they sue him? Thank you for your help

Answer 1

He can't go to jail for failure to pay a debt and if he is a minor they can't force him to pay it.  However they probably can come after you to make you pay it since you are his parent.  

As for fraud, they might have a charge if he lied about his age to get the card, but they should have done their homework before they gave out the card in the first place.  If he is under age then he wouldn't have any credit established and that should have prevented him even getting a card in the first place.  Especially one with a large enough credit limit to buy a $4000 laptop.  To be safe though it wouldn't be a bad idea if you contacted a lawyer.

Answer 2

Nah he won't do real time, he will however do hard financial time.

The judgement they're speaking of will allow the creditor to garnish his wages and/or seize his posessions to satisfy the debt.

Answer 3

Defaulting on credit card debt, while irresponsible, is not a criminal act in this nation and you cannot go to jail.  As a matter of fact, it's the debt collector that is violating the law here. It is a violation of the Fair Debt Collection Practices Act to make threats like this.

What they can do is take him to court and get a judgment against him...which may result in wage garnishment for you son.

Debt collectors LOVE to scare people with bogus legal threats. If they threaten legal action, per the Fair Debt Collection Practices Act, you have the right to speak with their attorney.

When you are speaking to them and they make a legal threat against you, immediately state the following:

Per the Fair Debt Collection Practices Act, I would like the full name of the attorney who will be taking action against me and his/her license # in the state bar association. I will be calling the state bar association to verify your attorney's information.  

If they do not give you this info, the threat is bogus. If they do give it to you, the threat is real and you should proceed with caution

Answer 4

How old is your son?

If he is a minor he is not responsible for the transaction. However the legal parent or guardian may be. If he bought it without your knowledge or permission (your card), you prob can return it to the store and state such, and that he is a minor, if that is the fact.

If it was his card, and if he is an adult, it's his problem.

I don't know what is "fraud against a federal inst."

These idiot collection agencies (illegally) threaten people all the time. I have addressed a number of posts on these issues and have researched the net on how people can deal with these people.

1. All they can do is try and sue for the money (and call you all the time unless you ask them to stop calling*). If you have no money, it's hard to collect.

2. Whatever you do, don't ever file bankruptcy for $4,000. I don't care how broke a person is, that is not the move you want to do, esp if you are young. Plus he will prob not qualify anyway then his credit is screwed up and has no money anyway. He'll get a job eventually, and they will be waiting. Get work ASAP.

3. No creditor or collection agency can "file charges." They can only sue. Only a District Attorney, state or federal law prosecutors can file "criminal charges" for criminal issues. Collections can only file "civil claims" (lawsuit) not "civil charges."  

If people could go to jail for making bad financial decisions, everyone would be in jail at some point.

Here is what to do...

Be familiar with:

*The Fair Debt Collection Practices Act (FDCPA)

http://www.expertlaw.com/library/consume...

Debt collectors may not:

- Falsely imply that you have committed a crime.

- Falsely imply that they are attorneys or government representatives.

http://www.bankrate.com/brm/news/cc/2003...

Debt collectors may not state:

- You will be arrested if you do not pay your debt.

- They will seize, garnish, attach or sell your property or wages unless the collection agency or creditor intends to do so and it is legal to do so.

-  Can not threaten a lawsuit if they do not intend to file.

http://www.bankrate.com/brm/news/cc/2003...

If you cannot return the item, even if you don't get all your money back, then contact the company who had the debt, and work out a financial plan.

I would prob get a free consult from an attorney who has collection experience for advice, since collectors are aggressive, and persuasive. You have to know the law and your rights. Their job is to say or do anything to get you to pay. U.S. federal law is very specific on what they can and cannot do or say.

Credit Counseling is another alternative who can assist you in negotiations and payment plans. Look for a non-profit company. Ask about their costs and fees, and what do they do for you. Get is all in writing.

Search Credit Counseling Agencies Approved Pursuant to 11 U.S.C. § 111 (US Dept of Justice official site)

http://www.usdoj.gov/ust/eo/bapcpa/ccde/...

example:

http://www.nfcc.org/

Get it handled.

You don't have to do anything by any certain time unless instructed by a Court Order.

Answer 5

No. Only the UK has debt jail.

Here, they have to prove that he didnt intend on paying just to sue him. But jail time is a definite no.

Answer 6

No.

They only have a fraud case against him if they can prove he used the card with no intention of paying it back. Not being able to make payments because of unemployment will only hurt his credit rating.

Filing for bankruptcy costs less then $4k ;)