Can You Be Arrested for Debt?

handcuffgavel_istockphoto_thinkstock_12Owing money isn’t supposed to be a crime.

So why are people being arrested over delinquent student loans and other debts?

The official line for why U.S. Marshals confronted Houston resident Paul Aker earlier this month is that he failed to appear in court over a $1,500 student loan taken out three decades earlier — not that he owed the money. But that’s a distinction without a difference for many Americans who get caught in the gears of the highly profitable debt-collection industry.

In my latest for NerdWallet, find out how private law firms are convincing courts to turn civil cases into criminal ones.

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Comments

  1. The point is neither foreclosures nor arrests can lead to plummeting number of debtor who default every year. I seriously fail to understand why bankruptcy is often overlooked as a not-so-pragmatic step. Plus, as you have pointed out- it is important for debtors to find out about their rights as debtors.