Bankruptcy, Debt Consolidation, and Debt Settlement – Don’t fall prey to scammers – Part 2

This post is the second in a series on debt, bankruptcy, debt consolidation, and more. If you haven’t read part 1 yet, I recommend you do before continuing.

History of debt (continued)

It was common for those who ran the debtor’s prisons to charge their prisoners for room and board, adding to the debt they were attempting to work off. This effectively created a self-perpetuating debt cycle, trapping those that fell into it in indentured servitude – what we would call slavery. These kinds of policies were one reason why the early American colonists wanted to flee England

With the memory of British debtors prisons fresh in their mind, the early American colonists attempted to keep a similar system from springing up here. Unfortunately, the idea of debtor’s prisons did cross the pond with the colonists, and it wasn’t until 1833 that de jure debtor’s prisons were abolished in the US. A century and a half later, in 1983, the Supreme Court upheld that the policy of keeping people in prison for unpaid debts violated the right to equal protection under the 14th amendment. Another big part of getting rid of de jure debtors prisons in the United States was the rise of bankruptcy law and accessibility of bankruptcy for the masses.

Although de jure debtor’s prisons, that is, those that are sanctioned by law, are a thing of the past, there are still instances of de facto debtor’s prisons – those that are, in fact, debtor’s prisons, despite the fact that they have no legal sanction. We tend to see this most commonly in the imprisonment of those unable to pay court costs or tickets.

Check back soon for Bankruptcy, Debt Consolidation, and Debt Settlement – Don’t fall prey to scammers! Part 3. In the meantime, check out our page on avoiding debt consolidation scams.