I don’t think people should be sent to prison for not being able to pay a debt. It rarely happens, but it’s important to know the sorts of debt where this is a possibility.
About a hundred people a year are sent to prison for council tax arrears – here is a case where a mother was in prison for 40 days before being released.
About 30 people a year go to prison for not having a TV licence – although new sentencing guidelines in 2017 should reduce this it still sometimes happens, see Belfast grandmother jailed after not paying TV licence fine released from prison.
What sort of debts can you be sent to prison for?
You can only be sent to prison for non-payment of debts where the case was heard in a Magistrates’ Court. These are:
- council tax arrears, see National Debtline’s Factsheet;
- business rates, see Business Debtline’s Factsheet;
- income tax and VAT debts, this is very rare as it’s used mainly for large-scale tax evasion rather than just owing money, see Tax Aid’s Factsheet which looks at HMRC’s other enforcement options;
- magistrates court fines, this includes fines for not having a TV licence, see National Debtline’s Factsheet and child support arrears.
You can’t get sent to prison for other debts. This includes:
- bank loans,
- credit cards,
- catalogues,
- HP,
- car finance,
- payday loans,
- overdrafts,
- utility bills,
- parking tickets and
- any money you owe to a business or an individual.
All these debts are dealt with in a County Court not a Magistrates’ Court.
(There is an exception. If you get a CCJ from the County Court and afterwards are sent an Order to Attend Court for Questioning or you are asked to complete a N56 Form for replying to an attachment of earnings application, then if you don’t attend court/send back the form you could be in contempt of court and sent to prison for that… If you get either of these forms, you should get advice immediately, call National Debtline on 0808 808 4000.)
Prison is the last resort
Prison is not going to be considered until other ways to get you to pay the money have failed. For example, a council has to have sent council tax arrears to the bailiff and the bailiff has to have been unable to collect them before prison is considered. In many arrears of the country, councils don’t start court proceedings to send anyone to prison for council tax debts.
The best way to avoid prison is to make an arrangement to pay a debt earlier… if that seems impossible, talk to a debt adviser about your options. These sorts of debts are more important to pay than credit cards or loans – your other debts will have to accept less money so you can repay the priority debts faster.
The magistrates have different options for the different types of debt, so read the relevant factsheet above for the details. However broadly before sending someone to prison (the legal term is “committal to prison”) there has to be a means enquiry hearing at the court which you must attend.
You should only be sent to prison if the magistrates decide that the reason you haven’t paid the debt is because of either wilful refusal or culpable neglect:
- wilful refusal is where you are deliberately refusing to pay the debt even though you could – for example if you are refusing to pay a tax because you think it is unfair;
- culpable neglect is where you could have paid the debt but used the money for something else that was less of a priority. “Culpable” means you should be blamed for doing this. So if there simply wasn’t enough money to pay the debt, or you were having problems budgeting because of an erratic income or mental health issues, it can be argued that it wasn’t your fault.
The magistrates have various alternatives to prison. The main aim of the hearing is to get the debt paid, not to punish you, so a reasonable offer of repayment should be accepted.
If you can’t afford to pay, then the magistrates may be able to write off some or all of the debt (the legal term is “remit”).
Get help and turn up to court
If you have to go to a means enquiry try to get help from a debt adviser such as National Debtline, your local Citizens Advice or a solicitor beforehand. They will be able to help by:
- describing what happens in court;
- helping you draw up an income and expenditure statement to take with you;
- making a list of points about your case for you to take, such as the reasons you were having financial problems;
- looking at what you can realistically afford to pay. It’s important you don’t offer more than you can afford, because you may be given a “suspended sentence” on condition you make the agreed payments.
It is essential that you turn up to the court hearing. Even if you have no money at all and think there is nothing that can be done!
At many Magistrates Courts there is a duty solicitor – someone there to help anyone who turns up without their own solicitor. You should try to get to the Court an hour before the hearing time and ask if there is a duty solicitor. If you have an income and expenditure sheet and some background notes with you, this helps a great deal by saving time.
Most cases where someone is sent to prison they didn’t get advice beforehand
First, the sentencing guidelines for not having a TV licence have been changed from April 2017. There is now a conditional discharge option, instead of a fine. You can’t get sent to prison for not having a TV licence, but the fines are often very large for people on a low income to manage, and as these were Magistrates’ Court fines it was possible to be sent to prison for not paying the fine. About 30 people a year have been imprisoned as a result of a fine for not having a TV license.
Second, a single parent who was sentenced to 81 days in prison for not paying council tax was released after the High Court decided that:
The magistrates’ court failed to carry out a proper and adequate means inquiry as required … and were not in a position to determine if non-payment was the result of culpable neglect nor whether the orders were appropriate mechanisms for enforcing the debt.
Of course it’s not good news that a Magistrates’ Court made such a poor decision in the first place.
Divide your debts into priority and non-priority
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Find out your options and where to get help
Paul Graville says
That’s what I like about Debt Camel the advice you get is second to none.
Verity says
I got into debt through credit cards and catalogues they gave me credit even though I was on benefits not working. So yes. Got into a place I couldn’t afford, took advice and got an IVA which the original company said would be paid in 3 years. I paid it every month (I was receiving more in benefits then, and just managed it, ) Then I got tossed to a few other Iva company’s and info changed, I paid the 3 years like I was originally told so stopped paying, now they say I still owe and debt companies are threatening ccjs etc I’m not n the same amounts of UC anymore I’ve less and I just can’t pay… if I was given the right info in the first place…. I’m scared I’m a single mum to a 6 yr old and I don’t know what to do
Sara (Debt Camel) says
Who was the original IVA firm? Do you have any of the paperwork?
Has the last IVA firm failed your IVA? Did they send you a letter of termination ion and. Failure report that lists the outstanding debts?
Are you renting? Private or social? Do you own a car or have one on finance?
Where's the justice says
Well, how about seeing the whole thing from a creditor’s side.
Imagine you are owed £150k by someone. This person tells you he/she can only pay you £20k or he/she will make himself/herself bankrupt.
The problem is it is not the £20k that he/she can afford to pay, but this is the amount he/she is willing to pay. He/she owns a property outright valued at £325k-£375k with his/her spouse.
I know it is just a very brief example, but would you say the person who owes you £150k should go to prison by not paying it back in full or are you fine to lose £150k and the person doesn’t need to go to prison?
Sara (Debt Camel) says
I don’t think prison is appropriate for non payment of debt.
Would I be happy? I would not have lent such a large sum of money that I was not prepared to lose without taking security.
Where's the justice says
Like I said, it was just a very brief example, but I am happy to expand it if you want.
Once again, imagine you are wrongly accused by someone and he/she files a court claim against you. You hire a solicitor to defend you. Your solicitor goes through the case, you even hire a barrister for a second opinion. It is clearly that the claimant doesn’t have a case. You tell the claimant your findings, you arrange a mediation to resolve the matter, but the claimant simply doesn’t listen to you. You battle the court case for 2 years, you spend over £150k on the legal fees. In the end, the judge has dismissed the claim. The judge orders the claimant to pay your fees. You approach the claimant. The claimant simply says he/she cannot pay your legal fees in full. He/she will only offer you £20k to call it a day or he/she will go bankrupt. You ask the claimant to provide his/her financial status, the claimant deliberately makes up some figures to avoid paying you the fees.
Sara (Debt Camel) says
so let him go bankrupt. If he has assets, you will get something back. Sending him to prison isn’t going to magic money out of thin air.
Where's the justice says
Here is the second part of my reply, your website says my reply contains too many words…
Just think about the whole thing, first of all, the claimant did not have a case to start with. The claimant was even advised to drop the proceedings, but the claimant insists to continue. In the end, the claimant lost the case and he/she can’t pay for your legal fees. How do you feel about that?
And to make it worse, as I said at the beginning of the story, you are WRONGLY accused for the whole thing. In fact, the evidence shows you have nothing to do with the whole thing but the claimant still chooses to sue you. You end up with over £150k legal fees and you are not getting it back, why do you think it is inappropriate to send the claimant to prison?
Furthermore, most of your £150k legal fees come from bank loans, credit cards and borrowing money from family and friends. How about that?
Many people in this country are abusing the law and the legal system. They go and sue other people for a wrong reason and when they lose the case, they just go bankrupt instead of paying for their mistake. These people are FAR too easy to get away from what they owe.
Obviously, in the story I have just told you here, you are not recovering your legal fees, the claimant is not going to prison. It’s either you go bankrupt yourself or you pay for the £150k debt for the rest of your life. Which one would you choose?
Sara (Debt Camel) says
I don’t think prison is appropriate for debts. You are not going to get me to change my mind on this with the detail of any case (and there is the old legal maxim that hard cases make bad laws).
If you want suggestions about your current situation:
Does the claimant have any assets? Or a good income? You are entitled to sue him for unpaid debts. Then after you get a CCJ, go for an attachment of earnings or a charge on their house. I can’t advise on these.
If you have borrowed on commercial loans or credit cards and you are unable to make the repayments from your income, look at making affordability complaints against the lenders.
If you are considering bankruptcy, or any form of debt solution, take advice! Talk to National Debtline on 0808 808 4000. They can go through your options and the pros and cons.
Where's the justice says
I don’t need to change your mind and I am not trying to your mind here. All I said is to see the debt issue from the creditor’s side.
Besides, from the very first reply you made, I could already see what sort of mindset you had there. I made an example of you being owed £150k, your response was you would not lend such a large amount of money without taking security. I don’t think any usual person would lend that much of money anyway, so for you to assume the £150k was lent, I was surprised.
To finish off my story, you will never understand the situation until you have physically experienced it. Hopefully one day you will get my point.
Sara (Debt Camel) says
I am not interested in commercial lenders – they make lending decisions, some of them go bad, that is part of their business, perhaps they should be more careful who they lend large amounts to.
I have sympathy for any private individual, but prison solves nothing and there are other options that can help. Please take debt advice.
I won’t be publishing any more comments on this.