Could this be?

[gimmethesimplelife]

Yesterday I was with my Mom at Micheal's (I don't know if this chain is nationwide? It's a craft store chain here in Arizona) as she paid off her house with the money she had received from her family friend and she had some paperwork she wanted to frame to the effect that the house was paid off. So we went looking for frames - it was our weekly lunch date.

We overheard someone with an assistant manager nametag speaking to a co-worker that he had received a letter to the effect that if he didn't make a payment on his student loans, he would be arrested and put through the criminal justice system. Now I don't know all the details here, and I have not seen the letter. My question is this - could this actually be? For those of you tired of me blasting the US due to health care, this is one thing I do like about the US - you don't get thrown into prison for being late on debt here. Or do you? I'm hoping this was just talk from someone really stressed out.....Rob

[CathyA]

I don't know the exact answer to your question. All I know is Federal Loan places let you pay only what you can afford, based on your income (but interest continues to accrue). My DD isn't paying anything on one of her loans (she has a bunch of them), for a year, and they said that was okay........but that interest is still accruing.
What you overheard makes me wonder if it was a private loan, or maybe he's made no attempt to figure out a payment plan with the lender, etc.

[sweetana3]

Payment notices from all agencies get progressively more insistent that debt be paid whether taxes or whatever. Depending on the type of debt, in our state the Sheriff can appear on your door, all kinds of liens and levies can be placed, etc. Varies due to who is owed the debt and how it has gone thru the judicial system. Most likely he/she is not responding and has their head in the sand.

Most people exagerate these issues when talking to friends and I have been on the other side of these conversations for decades. So don't believe anything you hear while listening in on other people's personal conversations. If you see the letter yourself and can read it yourself, fine.

[bae]

... one thing I do like about the US - you don't get thrown into prison for being late on debt here. Or do you?

You don't, generally speaking. Now, if you are violating a court order, or dodging a warrant for failure-to-appear, that's a different matter.

[Spartana]

No. As Bae pointed out, you can go to jail for violating a court order for things related to your student loan (but not due to not re-paying them)but otherwise, unless the student loan debt was taken out fraudulently (a criminal act), then it is basically a Civil matter between the creditor (including the Feds if a Fed loan) and the debtor. The creditor can probably take them to court and get a wage garnishment, maybe even force a seizure of some of their property (very highly unlikely in this case) but that's about it. I think the only uncollected debt that can land you in jail is for child support. In addition, it is illegal for the debt collector to threaten anyone with jail for unpaid debts (Fair Trade Commissions Law or Fair Debt Collections Law or under something like that) and THEY (creditor) can be legally reprimanded and fined for doing that.

[iris lilies]

This is probably something to get all worked up over and if you can pin it on Nanny G (which I would be happy to do--let's try that together) than all the better.

[Dhiana]

Considering what has been done recently to the student loans with the Dept of Education I wouldn't put it past one of these companies to send a nasty letter like that.

Buried in the Affordable Care Act (Yes, your Student Loan question may really be all because of Obamacare) is a something about student loans with Direct Loans being sold off?/moved?/transfered? to other companies and it has made many people's student loans that were in perfect standing a nightmare. Mine included! Multiple illegal activities have been done to holders of these loans.

Do I believe a letter like that was sent? Yes. Is it enforceable? Not likely.

[Yarrow]

Years ago, my next door neighbor's checking account was "seized" for long delinquent student loans. She was unable to access it - they took every cent from it to compensate for her non payment. She was beside herself, but had been ignoring letters for months that told her that would be the end result of her not responding to them....

[ToomuchStuff]

You don't, generally speaking. Now, if you are violating a court order, or dodging a warrant for failure-to-appear, that's a different matter.


This is accurate, and IANAL, so I don't know what all states do. Here, the sherrifs dept. serves, summons/etc. So collectors will misuse terms, intentionally, to cause either anger or fear, because they are more apt to get money from those two emotions.


And here I thought this was going to be about the cc issue that Micheals announced they had (smaller then Targets though).

[frugal-one]

Speaking of Michaels..... just read in today's paper that they now have a credit card leak too.... similar to Target..... geez! Saw that posted above tooo sorry.

[tetrimbath]

A news article from NBC, May 2013 (http://www.nbcnews.com/feature/in-plain-sight/sentenced-debt-some-tossed-prison-over-unpaid-fines-v18380470) talks about arrests for non-payment of debts; particularly unpaid court-ordered fines. Another aspect is that, even a person can't legally be put in jail for debt, judges may interpret the situation differently and mistakes do happen. A more up-to-date article would be best, and different states may have different responses.