Money is complicated, but this doesn’t absolve you from responsibility when wrongfully managing it. The word goes you can’t be arrested if you don’t pay your taxes or if you forget to pay legal obligations, like child support, or even your debt.
But is this true? Apparently, not.
Debt collectors might not be able to arrest you on their own, but the legal system has all the necessary mechanisms to solve such disputes. Below are some of the financial obligations you might have, and how not paying them will impact your life.
Forgetting to Report on Your Tax Return
Maybe one of the most common issues when it comes to reporting on your tax returns is completely overlooking to do it. If you work more than one job, you will be faced with more than one W-2 forms. This might be a bit of an issue, since you may be more likely to forget about one of the W-2 forms when submitting them.
Today, most forms are submitted online to the IRS, and the body knows exactly if you forget to submit one. In this case, you are very likely to face penalties and interest on the amount you fail to declare. IRS offers you three years from the due date to submit the rest of your forms. If you fail, you will face federal penalties.
These penalties are calculated as a percentage of the tax you owe to the IRS, which in return will assess your omission as a “failure to pay”. In case you have a refund to pay, this scenario won’t happen. But when penalties appear, you should know they are costly. The monthly penalty is 0.5% per month from the balance due date, and it can reach 25%, maximum.
If the IRS thinks your omission is fraud attempt or signals negligence on your part, it will charge an extra 20% to the unpaid amounts.
While many fear imprisonment in case they forget to submit a report on their tax returns, this is not a realistic prospect. You will simply be charged extra for the amounts you owe until you remember to pay those.
Forgetting to Pay Off Debts
Wondering if you can be arrested for forgetting to pay off your debts? Well, this is a little more complicated than it looks. While you can’t be arrested just because you owe money to creditors, they can legally sue you and settle the dispute.
Legally, debt collectors can’t even threaten with arrest in case you fail to pay the amounts you owe. However, in extreme cases, some kind of debts can lead to arrests if fraud or theft is suspected. It can also result in an arrest if you defy a court order to pay the due amounts.
Know your rights. It’s a good idea to inform yourself on what debt collectors can legally do and what they can’t. You should know they can’t make arrest threats, at least in the US. The Fair Debt Collection Practices Act of 1977 is preventing them from falling into such practices. But what debt collectors can do to get the money you owe is using the legal system to their advantage.
This is one of the most effective legal mechanisms used by debt collectors across the US. And you should know that thousands of hundreds of civil lawsuits over debt payment are filled in annually, by debt collecting agencies.
Statistics show that less than 10% of debtors are represented by an attorney in court when faced with such charges. But whether you receive San Diego warrants, San Francisco warrants or warrants emitted by any state court, go ahead and hire a professional lawyer or attorney. This will offer you more chances to win a similar lawsuit. In case you fail to show up in court, you lose the lawsuit by default. If you hire a skillful and knowledgeable attorney, they will be able to use all the resources and knowledge they have to lower the negative outcomes you might face.
Legal loopholes can also lead to arrest. This is why you want to find a reputable attorney in your areas and discuss with them debt-related issues. Aggressive debt collectors will try to approach the following tactics.
- In 1/3 states, debt collectors can have bad payers arrested if they fail to appear in court. The arrest usually comes for defying the court, not for owing money, but you will still encounter debt-related legal issues.
- Payday lenders use legal subterfuges to claim intentional fraud when their clients’ checks bounce.
- In case you fail to pay rent-to-own furniture businesses for their services and also refuse to give back the goods, they can sue you for theft.
Forgetting to Pay Child Support or Alimony
We all fear divorce and all the legal issues that might result from one. And we all dread child support and alimony, but if you fail to pay either of those, you can be legally arrested.
Failure to obey court orders results is called contempt in legal terms, and if you fail to obey it, the other partner has all the rights to call you in court. To be obligated to pay child support, however, you have to be faced with a legal document that orders you to do so. If the other partner calls you in court when you fail to obey that document, you must explain why you failed to pay child support. It may also result in an arrest warrant.
Once again, you want to hire a reputable attorney or lawyer to represent you in court. To avoid arrest, you need a knowledgeable professional, able to prove you aren’t purposefully disobeying the child support decision. If they can prove that you have solid and motivated reasons you haven’t been paying child support, they can negotiate new terms.
While getting arrested for not being able to meet your financial obligations is not a common occurrence, you want to ensure you are fully aware which events can and cannot have you arrested. And when those appear, you want to collaborate with professional lawyers or attorneys.