The internet was abuzz recently with
news that armed U.S. Marshals arrested a Houston man for failing to pay a $1,500
student loan that he had received in 1987 to pay tuition at Prairie A&M
University. The man was temporarily detained before being brought before
a judge, who ordered him to repay $5,700 for the loan and accumulated
interest, plus $1,300 in expenses associated with his arrest. Remarkably,
this is not an isolated incident. U.S. Marshals are reportedly preparing
up to 1500 arrest warrants to individuals who hold old
student loan debt.
The Houston debtor's arrest for his 30-year old debt was purportedly
not preceded by any recent notices or demands for repayment. Legislators
and debt collection experts are questioning the practice of arresting
individuals for old student loan debt. The U.S. government, which guarantees
most loans for higher education expenses, is apparently taking a position
that failing to repay student loan debt is the equivalent of stealing
from the government.
average student debt load for college graduates in 2015 grew to $35,000. Unless the government changes its debt collection practices, it can be
expected that non-payment of those loans may ultimately lead to similar
arrest actions by U.S. Marshals. Rather than allowing a debt situation
to get that far out of hand, individual debtors will be better served
if they contact their lenders to negotiate payment and debt resolution options.
Most recent graduates will have an option to make lower payments against
their student loan debt, with payments calculated as a function of their
income. If student loan debt continues to be a problem even with lower
payments, debtors can contact their lenders to negotiate debt reductions
or loan extensions. At the far end of the spectrum, an individual may
be able to get rid of student loans by failing bankruptcy if they can
prove that repaying those loans will cause an undue hardship. Debtors
should remain aware, however, that this argument will succeed in only
a minority of cases, and that student loan debt will not be discharged
in either a Chapter 7 or 13 bankruptcy.
On the bright side, a bankruptcy filing can help you address student loan
problems and prevent the future prospect of an arrest by U.S. Marshals. Please
contact us if you are having trouble repaying your student loans. We can help you
explore your payment options and assist you in negotiating with lenders
before your problems become unmanageable.