A recent story about a Fox26 News – Student Loan Nightmare in the New York Times about a man who owed a $1,500.00 student loan debt provides an example of why debtors may wrongly believe that failure to pay a private debt may result in their arrest and incarceration.
“In a country where 40 million people owe upward of $1.2 trillion on their student loans, it’s not hard to imagine why a tale about armed federal agents showing up at the door of a Texas man to arrest him over unpaid student loans set the Internet abuzz.”
This is an example of why those acting on something they read or – much worse – heard about the law is a really, really bad idea.
It is ironic that many of those who are in debt because their incomes have declined wish to get back to the ‘good old days’. In the ‘good old days’, those who became indebted due to misfortune or misjudgment were often imprisoned for not paying their debts. In England, during the 18th and 19th centuries – and later in the United States – thousands were imprisoned each year for unpaid private debts. Being imprisoned was a means of compelling payment, not a substitute for it. Generally those put in the ‘Clink’ – the name of an English debtors’ prison and a slang term for being incarcerated for debt – were required to pay their creditors before being released.
Among those imprisoned for private debt was James Wilson, a signatory to the Declaration of Independence who was imprisoned while still serving as an Associate Justice of the U.S. Supreme Court. Robert Morris who also signed the Declaration of Independence was was also imprisoned for private debt from 1798 to 1801.
Debtors’ prisons for private debt were abolished in the 19th century and the first bankruptcy laws enacted. Like the Hebrews of biblical times, the Greeks of the 5th century BC and 19th Century England, the United States was an expanding empire and favored social cohesion by avoiding a permanent debtor class and the conflict it would engender.
Our office has represented those experiencing serious debt problems for a very long time. Some of those who call us for the first time are terrified about the dire consequences that may befall them. They are assured by us that there are no debtors’ prisons in the United States, and that only those who have obtained money by means of force or deception go to jail. We explain that those who are arrested – like the man in the story – are arrested because they failed to show up in court or provide financial information when ordered to do so by a court and therefore are in contempt of of a court’s order that he appear. ***
To summarize, if you are required to appear or provide information by a court order, make sure to show up and/or provide the required information.
***Whether or not the United States Government should be devoting substantial resources to collecting what amounts to chump change is a question of public policy and not law, as is the question of whether the Special Civil Part of Superior Court of New Jersey should be acting as a collection agency for junk debt buyers.