Contempt of Court

Contempt of court is an effective method to collect a debt.  You thought that you could ignore a lawsuit.   Perhaps you thought you could just let a home go back in foreclosure. There would only be a default judgment. Wrong! You can go to jail for contempt of court in Kentucky by ignoring court paperwork. Debtor’s prisons were abolished in 1833 in Kentucky.  Except for child support or taxes, jail is never used to punish someone for not paying.  But our Jefferson circuit court judges jail people for failing to appear in court.  And if you just walk away from a home, fines for housing code violations can also put you in jail.

But debt collectors in Kentucky often ask a judge for jail time when you do not respond to a summons to appear in court for questioning.  People are not generally jailed for not paying a bill.  But debt collectors have found contempt allows them to put a person in jail until a debt is paid. The bond you pay to get out of jail is almost always equal to the debt and the debt collector just attaches the bond if you fail to appear. They continue to use contempt and jail as a debt collection technique.

Debt Collector Contempt of Court for Default Judgements Strategy

Here is how a debt collector can use contempt of court for default judgments to collect a debt:

  1. The debt collector files a lawsuit legitimate or not so legitimate.
  2. If a Debtor is served with the complaint that also requests that the Debtor files an answer within 20 days. The Debtor ignores the judge’s order to answer within 20 days, then the debt collector gets a default judgment.
  3. Then the debt collector’s attorney files discovery after his judgment.   This includes interrogatories and a request for production of documents asking the debtor for information about where his assets are.  Sometimes the Debt collector will ask for a hearing requesting that the Debtor appear to answer these questions.
  4. The Debtor ignores and does not answer or appear in court (this attitude angers the judge).
  5. The Debt collector, then asks for an order of contempt of court and specifically jail time to force you to appear.  The bail often equals the amount of the debt to get out of jail.
  6. The Debtor has to raise bail money to get out of jail,  The Debt collector simply attaches the bail bond or deposit.   The Debt Collector always expected the Debtor to assume and ignore these court orders.   The contempt of court came from ignoring the orders of the court to answer discovery.

How Your Bankruptcy Attorney Can Help You

This technique is popular with debt buyers who purchase charged-off debts for pennies on the dollar.  Debt Collectors sue collecting the interest, attorney fees, court costs and the full principle.  “Zombie debt” buyers will buy bankrupted debts and attempt collection regardless of the discharge.

These Zombie debt buyers often purchase debts after the statute of limitations has run on the debt.  They may attempt to collect from debtors who have filed bankruptcy.  They may lack any of proof the Debtor owes the debt. What Collectors and foreclosure servicing companies are doing is legal but they are relying on Debtors to give up and ignore lawsuits. A collection lawsuit involves weeks and months of work. Just because you don’t hear anything doesn’t mean the clock isn’t ticking and you can ignore a lawsuit.

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