Can I Be Arrested For Not Paying My Student Loan?
In the last few days, I have had my bankruptcy law clients ask me if they can be arrested and thrown in jail for not paying their student loans. Their concerns come from media sensationalizing what happened to an individual in Texas Last week Paul Aker of Houston who was arrested and the news said it is because he owed a 29 year old student loan.
Well, not exactly. While everyone panics and believes that they are now going to be put in prison because they can’t afford to pay their student loans, this was really about the Court system, not about what kind of loan it was.
Why Did He Get Arrested Over a Student Loan Debt?
In 2006, Mr. Aker was sued in Federal Court to collect on the student loan. Mr. Aker failed to respond to the complaint. A Default Judgment was obtained. Then, as is usual, Mr. Aker was served with a Motion to Compel Attendance at Oral Post-Judgment Deposition. (In California we call it an Order of Examination.) In essence, this is a short hearing where the judge orders the defendant to answer questions put to him about his finances and/or make an agreement with the creditor on how to pay off the debt. Remember, this is true in ALL collection cases, not just student loans.
If you do not show up to a Court’s Motion to Compel, in any State or Federal Court, an arrest warrant can and often will be issued. Mr. Acker didn’t show up for that hearing so in 2012 the Judge issued a “bench warrant” for his arrest. It doesn’t matter if it is a family law matter, a collection case, an auto accident or any other type of case. If the Court orders you to be there, you better be there. Otherwise you are going to make a Judge very unhappy at your disrespect of him/her.
Why So Many Officers To Arrest Him For His Student Loan Debt?
While Mr. Aker sensationalized much of the “student loan arrest,” the reason there were so many officers was due to his own actions.
According to the account given in CNN Money, Mr. Aker stated that he was approached by two U.S. Marshals outside his home. Then, he says, “I went inside to get my gun because I didn’t know who these guys were.” From the account of the Marshals, Mr. Aker verbally stated that he was going to get his gun. They, naturally, called for backup. Mr. Aker stated that once he saw local police out there, whom he recognized as police, he came out without his gun.
Mr. Aker was not put in a jail. He was held in a holding cell for the short while before the judge was available to conduct the case. He then made an agreement with the collector to pay in $200 installments.
What Does This “Student Loan Arrest” Have To Do With Bankruptcy?
As a general rule, student loans are extremely hard to discharge in bankruptcy. However, if you have problems paying your student loan debt because you are trying to pay credit cards or other debts, a bankruptcy can control or eliminate these debts and put you in a better position to pay your student loan.