For the most part, America abolished debtors prisons in 1833, and they were found unconstitutional in 1983 (Bearden v. Georgia). I say for the most part because that offer doesn't apply to things like fines and court fees [1].

Assuming you're truthful in your application for the loan, it's not theft. It may be a poor decision on the part of the lender, but of course, that's why interest rates exist and scale with your likelihood of nonrepayment.

[1] https://www.forbes.com/sites/nicksibilla/2019/08/30/federal-...