Can you be arrested for owing money to a small business?

UPDATED: Aug 12, 2012

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Can you be arrested for owing money to a small business?

Asked on August 12, 2012 under Business Law, Iowa


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It depends on the following:

1) You borrowed money, purchased an item, or had the business perform work (etc.) in good faith, intending to pay or repay; however, since then, circumstances have arisen that prevent payment. This is not a crime, since you had no criminal intent (called "mens rea"); therefore, while you could be sued for the money, you could not face criminal liability.

2) You incurred the debt in bad faith, intending to not pay--that is a criminal act. Or you paid with a check you knew was bad at the time you issued it--that is also a crime. In these case, since you had criminal intent, you could face criminal liability.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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