The history of US debtors prisons and the abolition of jail time is a very interesting subject. Many of the colonists “shipped” to the British colonies in the Americas were sent due to their inability to pay off debts in England. 

These became “indentured servants” that worked to pay off their debts over the course of many years in the new colonies. 

The alternative was languishing in debtor’s prison in jolly old England, being branded (literally branded) as a serial debtor.   

The history of the United States is intertwined with debt and immigrants.  Debtor prisons weren’t formally abolished until the mid-19th Century.   

In 19th Century Great Britain, more than half of all people incarcerated were there because of unpaid bills and debts.

debtors prisons

In part, the colonization of the Americas began with prisoners who were shipped over the Atlantic to ease the burden on Britain’s hopelessly overburdened penal system. 

Landowners, that needed laborers to work their property, were happy to assume these indentured servitude contracts as they received nearly free labor in exchange for food and meager shelter.   

The River Thames was lined with ships moored to its banks, overflowing with prisoners serving time at His Majesty’s pleasure.   

This created an amazing economic opportunity.   Why not ship bad debtors off to the colonies as indentured slaves where they could work off their debts for a pittance, rather than rotting away in cells?

Bad debtors were literally sold by the King to prosperous tobacco farmers, cotton farmers and mills up and down the American coast.

US Supreme Court banned debtors prisons in 1833

From the late 1600s to the early 1800s, debtor’s prisons were purpose-built to jail borrowers who had not paid their dues. 

Records exist showing some people being jailed for 60c ($130 approx in 2021).

These dungeons were made to be as uncomfortable as possible in an effort to get reticent borrows to find the means to pay up or to sell their skills for better crumbs.

Some ‘famous’ debtors prisons include the Walnut Street Prison in Philadelphia and the New Gaol in downtown Manhattan. 

The name of The Clink is thought to come from the sound of the gates clinking shut on the prisoners or the sound of the prisoners’ chains. 

If you thought debtor’s prisons were for vagrants and the dirt poor, think again.

Two signatories of the US Declaration of Independence James Wilson (an associate justice of the Supreme Court) and Robert Morris (a close friend of George Washington) both spent time in debtors’ prisons because they did not pay what they owed to their creditors. 

Henry Lee III, a Revolutionary War general, and father of Robert E. Lee, was also imprisoned at one time for his debts.

In most states, offenders were kept incarcerated until they could obtain the funds, or they could work off their debts with years of penal labor.

This meant that many people died in prison because of their poverty.

After the War of 1812, many Americans were in debt and the idea of the new Federation jailing its own people for debt, after throwing the British oppressors out, was not very palatable to the fledgling country.

As a result, Congress abolished the practice of jailing bad debtors under federal law in 1833.

Between 1821 and 1849, twelve states followed suit. 

This was followed by the introduction of criminalized bankruptcy, which was transformed into new legislation designed to allow the debtor to pay what they could afford and absolving the remaining sum.

Only in 1983, the Supreme Court affirmed that incarcerating indigent debtors was unconstitutional under the Fourteenth Amendment’s Equal Protection clause.

Can you still be jailed over money matters?

Yes. You can be sent to jail in some states if you had fraudulent intent from the outset when taking out a loan.

You can also be jailed for not paying your taxes, alimony, and child support.

While you cannot be jailed for not paying a debt, you can be fined for being in contempt of court.

If a company files a lawsuit against you over debt and you do not turn up for a hearing, the court will find you in contempt and may put you in jail.

The bond for release will normally be set to the same amount as your outstanding loan. 

This does not mean that your debt will be wiped clean. The bail bond is an entirely different thing.

Also, if a judgment is issued against you and your creditor calls you to a Debtor’s examination and you do not turn up, you can also face jail time. 

Contempt of court is taken very seriously. One judge famously fined himself $25 when his own mobile went off while court was in session.