Can someone get arrested for not paying a debt less than $5K?

The credit card company will eventually send the uncollectible account to a collection agency. When/If they are unable to collect, they will turn it over to a commercial law firm who will seek a judgment against your friend and garnish his wages. He won't be arrested.

No, there is no law in any state in the US that would send a debtor to jail or prison.

Tell your friend to call these collection agencies & banks and ask for some flexibility and ask if they can work out some kind of payment schedule or if they're willing to accept a certain amount of the debt and forgive the rest. Most institutions are pretty generous for giving these types of terms out as they'd rather collect some instead of none at all.

The best thing for your friend to do is call these creditors. Send a letter as well explaining the situation make sure you are clear that you have every intention of honoring the debt but at this time you can not handle those payments. It is better if you do this yourself because most consolidation companies will get your interest lowered to 10% but will turn around and charge you 12%. Do not take the first answer either keep asking is this the best that you can do for me. One thing I have learned is that they are always willing to go lower than what they say they will go.

If by chance they have already sent them to a creditor be firm with them and tell them how much you can send them do not let them tell you how much they need from you. I have dealt with many collection agencies trying to tell me that they need a certain amount I just turned around and told them look this is what I can send you take it or leave it. As long as you are firm with them they will agree. Sometimes they can be really mean, but do not let them fool you they just want to get paid.

He has two options. one he can make payment arrangements with the collection agencies that fit his needs, remember collectors get paid commission when a balance is paid and when it gets to them usually the credit card company has accepted the debt as a loss and sells it to the agency for far less than it is worth. They are going to be very tough with him and will even in many cases try to tell them that it is not possible to make an arrangement and that he needs to pay or will be reported to the credit bureaus and things of that nature later they will threaten to take him to court but I will get into that below. If the collection agency agrees, they will set up a plan for him that will also need some negotiating, this collector will try to get a hefty first payment from him and believe me they will be again very tough always remember they are being paid on commission for this so they will try to get as much as possible and they will tell you that they need to talk to a supervisor which in many cases may be true but they have a set limit themselves that they can discount in reality before doing that. If the arrangement is agreeable, more than likely will give him enough time to make the first payment such as a couple of weeks and in some cases a month but if he misses that payment is going to be even tougher to get it set up again.

If it goes to court, which is very possible for 5K a Judge may agree to a judgement on any income that he makes, tipically it can take some months for it to go through but the problem is that at that time, he will be shorten an specific monthly payment from his paycheck and the collector will add any fees or charges to the original balance and he will have to pay for all which is very hefty including for example court costs, attorney costs, past due interests and original balance which could be way over/or at 45% more.

The last otpion that I don't neccesarily recommend because of the amount of debt owned is always Bankruptcy which will give him the ability to either have a court mandated monthly payment in his favor or if he qualifies eliminate the debt but it seems that for 5K he is better off making arrangements. Also i've seen in some cases the debt is accepted as a loss completly, it is still sold to collection agencies but a judgement will not be sought after because of the small amount which he is very close to but it is hard to know which way they have decided to go although some times you can tell by getting a copy of his credit report and see if it says charged off to profit and loss and in this case different collection agencies will call him for a very long time but will amount just to that but again only the collection agency will know the road to follow. I hope this helps.

one of the great things about this country is that primarily we are fair. There are no "debtors prisons" in the U.S. What your friend should do however is take the calls, explain the situation and even if he can only pay a couple dollars every couple weeks, they may help him out of the jam, and also help protect his already damaged credit from further trouble.