Can a collection agency arrest you?

Not lawfully. Only officers with legal authority to make arrests (such as policemen or federal agents) may ordinarily make arrests without a court order for arrest issued in advance. Sometimes an emergency may itself consititute a warrent and peace officers or even (in extreme cases) citizens may make an arrest but debt collection is not such an emergency. Except when it rises to the level of fraud, when it amounts to refusal to comply with a court order, and sometimes in cases involving family law (especially child support), failure to pay a debt is not generally a crime, and in such cases it's the fraud, or refusal to support a family, or obey the court that's the crime, not he debt. Movies and books sometimes recall debtor's prison, which was a part of English life until the 1800s, but most American states have never enforced imprisonment for debt, even before our Revolution. Wikipedia's Article on Debtor's Prison covers the topic well. http://en.wikipedia.org/wiki/Debtor%27s_prison If a creditor sues ye, and obtains judgment, the court may order various unpleasant mechanisms to force ye to pay, such as garnishing wages, impounding bank accounts, or seizing and selling property--but prison isn't one of them unless ye disobey such a court order, and even in that case ye could only be arrested for contempt of court and only by the police, not a collection agency. On the other hand, the law is rather harsh on creditors or collection agencies that harrass debtors unreasonably. The details of protections offered to debtors are complex and require a lawyer's assistance.