Arrested over student loans?
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When you consider the question: “Can you be arrested for not paying your student loans?” the answer should be, “absolutely not!” However, issues related to student loans could see a warrant for your arrest issued.
Debtors prisons were an ugly part of European and US history. Laws abolished them years ago but certain practices are similar. Unfortunately, aggressive debt collectors will use any means at their disposal, and that includes pushing for an arrest to scare you into paying (even when you can't afford to).
What Could Lead To Your Arrest?
Within the last three years, several arrests were made related to student loan debt, and it’s imperative to know what could trigger this dire consequence. If you miss a student loan payment, your account is delinquent.
You can resolve it quickly and reverse your delinquent status. If you don’t clear it up or make any payments for 270 days, you fall into default. In the interim, the loan servicer will report your late-paying status to the credit bureaus, and your credit score will drop.
Once you’re nine months behind and officially in default, the entire amount becomes due. You can’t pay up because if you had the money, you wouldn’t already be in default. The loan servicer can then turn you over to aggressive debt collectors.
Some debt collectors won’t waste any time and will file a civil lawsuit against you – that’s what can start the process that could wind up with you arrested. When a collector sues you, you should be served notice, and if you don’t do what the court says, it can lead to trouble.
How a Debt Arrest Works
It’s not your student loan debt per se that can result in your arrest, but rather your failure to obey a court order that can see you in handcuffs. Millions of debt collection lawsuits are filed each year, some related to student loans, and some lead to arrests of consumers that can’t pay their bills.
A student loan debt collector can win a judgment against you if you don’t show up to court to fight it. Sometimes, you might not have received notice if you’ve moved or for other reasons. The court doesn’t know why you didn’t appear, so they grant summary judgment against you.
Once the creditor has a judgment, they can request a hearing for you to appear about paying the judgment. If you don’t show up (perhaps because you didn’t receive notice), submit a reply, or turn in requested documents, the court may issue a warrant.
What’s scary about an arrest for a warrant like this is that to get out of jail, you may be required to post a bond equal to (or even greater than) the debt. Generally, you can work with a bail bondsman and give them something of value to guarantee your court appearance.
Some judges, though, may require a cash bond which can be impossible to come up with and could leave you sitting in jail. It’s scary to contemplate, but there are things you can do to avoid things turning this dire.
How to Avoid Possible Arrest
Even if you can’t pay your debts, keep your creditors updated on your address and contact information when you move or change your phone number. No one wants to get debt collection letters or phone calls, but this minimizes that chance for you to miss the notice of a lawsuit.
If you get a notice that a collector is suing you over your student loans, you should show up to court, even if you can’t afford to pay. You should bring proof of your income and inability to pay. If you don’t show, the debt collector wins by default, and that’s not a good thing.
You can also try two tactics to get yourself out of student loan default – rehabilitate your loans and get on an affordable payment plan or try for bankruptcy discharge.
- Rehabilitate and get on a better plan
An income-driven repayment plan might be affordable, even on a modest income. However, with your loans in default, you have to get that sorted first. Contact your student loan servicer about rehabilitating your loans and getting on an affordable repayment plan like IBR, PAYE, or REPAYE.
- Investigate bankruptcy discharge
Bankruptcy discharge might be possible depending on your financial circumstances. Increasingly, judges are trying to relax the standards on forgiving student loan debt in bankruptcy. If you have extenuating circumstances, you might qualify for relief of your college debt through the courts.
To find out more, read reviews from our clients then call +1-919-646-2654. Schedule a free student loan debt consultation with the Law Offices of John T. Orcutt at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.