You may have heard horror stories where people have gone to prison for failing to pay their debts. If you’re in debt yourself, this can be scary to think about - especially if you’re struggling to keep on top of it and the amount you owe seems to be spiralling out of control. The good news is that your chances of going to prison for a reason connected to debt is extremely rare. There’s also plenty of help available for anyone who is struggling. Read on so I can hopefully put your mind at ease.
Can you go to prison for debt?
Put simply, no, because being in debt isn’t a crime.
This hasn’t always been the case. In the 18th and 19th centuries, debt was criminalised in Britain and people of all classes were imprisoned for failing to pay their creditors. Since men were seen as responsible for a family’s finances, most of those imprisoned were male. In some cases, wives and children would be imprisoned too, particularly if they were unable to support themselves. Charles Dickens’ father, John, spent a few months at the Marshalsea debtors prison in 1824 because he owed a local baker £40. Charles had to work at a shoe-polish factory at the age of 12 to help support his father and other members of his family who were imprisoned.
Thankfully, times have changed and protections are now in place to help those struggling with debt rather than punish them.
When someone does go to prison ‘for debt’, they’re technically not going to prison for the debt itself. It’s usually because their behaviour is considered fraudulent in some way or they didn’t adhere to a court order.
How common is going to prison for debt?
It’s extremely rare for someone to go to prison for an issue connected with debt. When someone in debt is sentenced to prison and their debt was a factor, this won’t have been an overnight process. They didn’t fall behind on their payments on Monday and wake up in a prison van on Friday. The issue will have progressed over an extended period of time and the person may have refused or avoided multiple opportunities to resolve the issue.
Most people who are in debt will never end up doing jail time - even if the money they owe is never repaid. Usually, if a person can prove that they’re genuinely unable to pay, they won’t be convicted.
However, this doesn’t mean that ordinary people with no criminal background aren’t sometimes failed.
How unpaid debts can lead to prison sentences
Although going to prison ‘for debt’ isn’t technically how it works, it’s easy to see how debt issues can spiral and people can receive prison sentences despite not being hardened criminals.
In 2016, a woman from South Wales was sentenced to 81 days in prison for failing to pay £10 a week towards her debt. She spent 40 days behind bars before being released on bail. High Court judge Mr Justice Lewis ruled she should never have been imprisoned. He said: “There was no evidential basis on which the magistrates’ court could conclude that there had been culpable neglect in non-payment.”
And in 2018, a chronically ill grandmother from Belfast was sent to prison after failing to pay a £1,100 court fine she’d received for failing to pay her TV licence. Following her release, Sinn Fein MP Paul Maskey said: “I welcome the release of Anne Smith. I am glad that common sense has prevailed as she should never have been put in jail. There is an onus on the relevant authorities to ensure that measures are put in place to ensure that, in exceptional circumstances, compassion prevails and this never happens again.”
Each year, around 100 people are sent to prison for council tax arrears and roughly 30 people are sent to prison after failing to pay fines given to them for not paying their TV licence.
Which debts can you go to prison for not paying?
In order to be sent to court over a particular debt, the case needs to be heard in a Magistrates Court. The following debts could technically lead to prison sentences. Click each debt for links to relevant factsheets.
- Council tax arrears
- Business rates
- Income tax and VAT debts
- Magistrates court fines
- Child support arrears
It’s rare to be sent to prison for the above but it’s especially unlikely that you’d be sent to prison for failing to pay income tax or VAT. According to Tax Aid: “HM Revenue and Customs does prosecute some people every year, but these cases involve allegations of serious dishonesty or tax evasion. HMRC does not take such action just because someone has not paid their tax on time, or has difficulty finding the money to settle.”
Which debts don’t lead to prison?
You can’t get sent to prison for the following debts:
- Bank loans
- Credit cards
- Car finance
- Hire purchase
- Buy-now-pay-later
- Overdrafts
- Utility bills
- Parking tickets
- Payday loans
- Money owed to a business or an individual.
All these debts are dealt with in a County Court not a Magistrates’ Court.
However, in the blog which debts can you be sent to prison for not paying? debt expert Sara Williams warns that if you receive a County Court Judgement (CCJ) from the County Court and you’re sent an order to attend court or you’re asked to complete an N56 form, you must attend court and return the relevant documents. Failing to do so could be seen as contempt of court and this could lead to prison. She explains: “If you get either of these forms, you should get advice immediately, call National Debtline on 0808 808 4000.”
StepChange provides further information on this: “If you live in England or Wales and you’ve not paid a County Court judgment (CCJ), a creditor could apply to take money from your wages using an attachment of earnings.
“If you repeatedly ignore the letters the court sends you about this, a bailiff could be sent to take you to court, and you could be fined or sent to prison for up to 14 days. The fine or prison is a punishment for disobeying the court’s instructions, not for the debt itself.”
How to get your debts under control
If you’re worried about your debts and you’re concerned that they could lead to a court order, here are a few options.
Keep in touch with your creditors
Speaking to your creditors can be challenging, especially if you owe them a lot of money. But by keeping in touch with them rather than pulling a disappearing act, you’re showing that you’re responsible and care about fixing the problem. In some cases, creditors will work with you to make it easier for you to repay the money. This might involve a change in payment dates and/or repayment plans to spread the cost over a longer period of time. In some cases, the amount you owe might even be reduced, though this can vary depending on the creditor and the type of debt you have.
Seek specialist advice
There is far more help available than you may realise. Debt advice can be obtained for free, so there’s no need to worry about having to pay costly fees to get the help you need. StepChange and National Debtline are just a couple of places to start.
Know your priority debts from your non-priority debts
When working out which debts to pay first, many people prioritise the smallest debt or the highest interest debt. However, in reality it’s usually best to focus on the debts which would have the most severe consequences if they go unpaid. For example, failing to pay your rent or mortgage could lead to you losing your home. Failing to pay your car payments could leave you unable to get to work. If you financed your fridge, not making the repayments could lead to it being repossessed. Not only is this likely to be inconvenient, your food bill might increase and cause further problems. Take a look at my guide to priority debts to learn more and figure out which order to pay off your debt.
Adhere to court orders
It’s extremely important that you follow any court orders you receive, even if you think they’re unfair. By seeking specialist advice, you can get support throughout the process and make sure your rights are being respected. If you’re genuinely unable to repay the money you owe, debt experts will be able to help you find a solution.
