Contempt of court is an effective method to collect a debt. You may have thought you could ignore a lawsuit or a notice to appear in court. But consider this scenario. You fail to appear in court, and the judge orders a bench warrant for your failure to appear. You are then arrested. The bond to get out of jail is often the amount you were sued for. Even if you are not charged, the creditor can usually garnish wages and bank accounts or put a judgment lien on your home. Even if your bank account primarily has social security funds, you can lose those funds.
Debtor’s prisons were abolished in 1833 in Kentucky. Now, except for child support or taxes, jail is never used to punish someone for not paying. However, our Jefferson circuit court judges will jail people for failing to appear. What often happens is the creditor asks you to appear to answer discovery. Discovery is questions to be answered under penalty of perjury and these questions are designed to locate assets the creditor can attach.
Additionally, if you are in foreclosure and just walk away from a home, fines for housing code violations might also put you in jail.
Contempt of Court Proceedings for Default Judgements
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 do not generally go to jail for not paying a bill. Contempt allows debt collectors to put a person in jail until a debt is paid. The bond you pay to get out of jail almost always equals the debt, and the debt collector then attaches the bond if you fail to appear. They continue to use contempt and jail as a debt collection technique.
Understanding Default Judgements
A default judgment is a court order against a defendant who fails to respond to a lawsuit. This type of judgment is typically issued when the defendant has been properly served with the lawsuit and has not acted to defend themselves. For a default judgment to be entered, the plaintiff must prove that the defendant was properly served and failed to respond or appear in court.
In some instances, a default judgment may be entered without a hearing. IIn other cases, the court may require a hearing to determine whether the defendant has a valid defense or if the plaintiff has met the requirements for a default judgment. Even after a default judgment is entered, the defendant may still have the opportunity to appeal the judgment or request that it be set aside. The judge may eventually have a contempt hearing for a person and allow him to get out of contempt. However, many people remain in jail until the judge has that contempt hearing. Do not ignore the notice if you are notified that you must answer within 20 days or answer discovery. A person who ignores the notice to appear will often face contempt.
Consequences of Non-Compliance
Failing to comply with a court order can lead to being held in contempt of court, a serious offense that can result in fines, imprisonment, or other penalties. The court may also order the defendant to pay court costs, attorney’s fees, or other expenses related to the contempt proceedings.
Beyond contempt of court, non-compliance with a court order can lead to additional consequences, such as losing driving privileges, suspension of a professional license, or other penalties. Sometimes, the court may impose a fine or other monetary penalty for non-compliance.
Appealing a Default Judgment
If a defendant believes a default judgment was entered in error or that they have a valid defense to the lawsuit, they may appeal the judgment. To appeal a default judgment, the defendant must typically file a motion with the court within a certain time period, usually thirty days, and provide evidence to support their claim.
The court will review the motion and determine whether the defendant has presented sufficient evidence to set aside the default judgment. If the court grants the motion, the case will be reopened, and the defendant will have the opportunity to present their defense. If the court denies the motion, the default judgment will remain in effect, and the defendant may be required to pay the judgment amount.
In some cases, the defendant may also request that the court set aside the default judgment due to excusable neglect or other circumstances. The court will consider the defendant’s request and determine whether the default judgment should be set aside.
Debt collector contempt of court for default judgment strategy.
The following is how a debt collector uses contempt of court for default judgments to collect a debt:
- The debt collector files a lawsuit, legitimate or not so-legitimate.
- A defendant is served with the complaint. The Summons requests that the defendant file an answer within 20 days. Not the thirty days most people assume. If the defendant ignores the court order to answer within 20 days. Then, the debt collector gets a default judgment.
- The debt collector’s attorney will file discovery after his judgment. This includes interrogatories and a request to produce documents asking the defendant for information about the location of his assets. Sometimes, the Debt collector asks for a hearing, requesting that the defendant to appear and answer these questions.
- The debtor ignores and does not answer or appear in court (this attitude angers the judge).
- The debt collector then asks for an order of contempt of court. He will specifically request jail time to force you to appear. The bail often equals the amount of debt.
- The judge must find probable cause to believe the defendant is willfully ignoring court orders before issuing a show cause order.
- If the defendant raises bail money to get out of jail, the debt collector simply attaches the bail bond or deposit. The debt collector always expects the debtor to assume and ignore these court orders. The contempt of court came from ignoring the court’s orders to answer discovery.
How can your bankruptcy attorney help you with court costs?
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 principal, which can amount to several thousand dollars. “Zombie debt” buyers will sometimes even buy bankrupted debts and attempt collection regardless of the discharge.
These zombie debt buyers will also often purchase debts after the statute of limitations has run on the debt. They might even lack proof the debtor owes the debt. What collectors and foreclosure servicing companies are doing is legal. But they rely 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, so never ignore a lawsuit. You can almost always file bankruptcy and eliminate that debt.
Resources for Bankruptcy
Louisville Kentucky Bankruptcy Forms
About the Fair Debt Collection Practices Act • Video
Kentucky Default Summary and Agreed Judgement
Default Judgements and Zombie Debts
Kentucky Fair Debt Collection Practices Act and Contempt • Video
If you are thinking about filing bankruptcy, don’t delay because timing is often crucial. Don’t trust the bank or their attorney for advice. I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.
