Prior to the middle 19th Century, people that were in debt didn’t have the luxury of Bankruptcy!  The debtors that couldn’t pay their debt went to prison!

Most of the history of Debtor’s Prison was from Europe, but the United States had Debtor’s Prisons too.  It wasn’t until 1833 that the US Federal government and most states abolished Federal Imprisonment for Debtors.  Even some of the signers of the Declaration of Independence went to Debtor’s prison.

The famous author Charles Dickens’s dad went to debtor’s prison in England for a period of time.  In his works, we find reference to such prisons.

In Medieval Europe, both men and women were locked up together in a single large cell, until their families paid their debt.  The prisoners often died of disease contacted from other debt prisoners.  Conditions included starvation and abuses from other prisoners.

The irony (IMHO), is that the debtor goes to prison until his family can pay off his debt and get him out.  But (and here’s the irony), to get out of debtor’s prison, the debtor would have to somehow pay to get out, but he was in prison?!?  So how can someone in prison work to earn money to pay for his way out of prison?

While most countries have done away with debtor’s prison, China (not including Hong Kong where imprisoned debtor’s is still common), in 2008 had imprisoned the first mainland prison sentence for unpaid debts.  In fact, it’s possible to be imprisoned for life by not paying the debt incurred with “malicious intent“.

I was surprised to hear that China didn’t have a debtor’s prison originally, but now has one…