Does Anyone Understand This “Arrested for Student Loans” Stuff?
Posted by CircuitGuy 8 years, 10 months ago to Business
I keep seeing headlines about the person arrested for student loans. When you read the article, you find the arrests are for failing to appear in court.
I am confused by this. I thought in civil cases the only penalty for a defendant not appearing is that the defendant is likely to lose the case. I also thought it was perfectly acceptable not to show up if the defendant agrees with the plaintiffs that he legally owes the money. He would only show up if he disagreed, say if he thought the plaintiff changed the documents after they were signed or forged his signature.
Why would we arrest people and drag them into court? They can just say, “yeah, you're right. I owe the money.” Then the court gets to the same outcome as if the defendant hadn't appeared. So what does it matter if he's there?
When the defendant loses, the court issues a judgment against the defendant, and the plaintiff can use that judgment to take the defendant's stuff to make the debt good. If the debtor has almost no wealth and little income, it's wise for the creditor to tread lightly because if the creditor starts taking the debtor's ability to live, the debtor can declare bankruptcy. Nowhere in this whole scenario is there a debtors' prison.
Where the heck does law enforcement get involved in this? If I did work for a startup that failed and I sued them, would law enforcement drag them into court to say, “Yeah, we promised things to our investors, vendors, employees, and it didn't work. So we're not paying.” What would be the point of dragging them into court?
Does someone knowledgeable about contracts law understand this? Do student loans exist outside the normal system of contractual agreements people make?
I am confused by this. I thought in civil cases the only penalty for a defendant not appearing is that the defendant is likely to lose the case. I also thought it was perfectly acceptable not to show up if the defendant agrees with the plaintiffs that he legally owes the money. He would only show up if he disagreed, say if he thought the plaintiff changed the documents after they were signed or forged his signature.
Why would we arrest people and drag them into court? They can just say, “yeah, you're right. I owe the money.” Then the court gets to the same outcome as if the defendant hadn't appeared. So what does it matter if he's there?
When the defendant loses, the court issues a judgment against the defendant, and the plaintiff can use that judgment to take the defendant's stuff to make the debt good. If the debtor has almost no wealth and little income, it's wise for the creditor to tread lightly because if the creditor starts taking the debtor's ability to live, the debtor can declare bankruptcy. Nowhere in this whole scenario is there a debtors' prison.
Where the heck does law enforcement get involved in this? If I did work for a startup that failed and I sued them, would law enforcement drag them into court to say, “Yeah, we promised things to our investors, vendors, employees, and it didn't work. So we're not paying.” What would be the point of dragging them into court?
Does someone knowledgeable about contracts law understand this? Do student loans exist outside the normal system of contractual agreements people make?
They could have taken out student loans and then not used them for school.
Which would be fraud legally and subject them to criminal prosecution.
;)
.
Like you...I find these scenarios very curious. Hell, they've swat-teamed a single father and his two little kids here a couple years ago because his estranged wife (location unknown) had failed to pay her student loan. They kicked in the guy's door while he was getting his kids ready for school. I found the whole story very disturbing. Even the news crew was disturbed and said they'd get to the bottom of it (it was a new phenomenon at that time). Of course, the story went bye-bye...
Whatever you do, don't confuse them with esoteric deep thinking exercises like economics or even basic addition. Telling them that if you took all the money from the top 5% richest people it wouldn't pay just medicare for three years would be absolutely rejected as a Republican lie, just because it doesn't agree with their programmed socialistic world view.
Face it, we now have that greatest and most lofty prodigy of Marx and Lenin, a generation of mind numbed serfs who being unfit to hold a real job are ready to willingly replace the greatest and richest nation for the for the dung huts and ox carts of the third world as long as they can keep their cellphones, JZ, video games and the internet.
Then there's the pied-piper of change, BO himself, but let's hold that rant for a better time.
The "perpetrator" in this case admittedly did everything he could to avoid payment, including moving without leaving a forwarding address, shifting money from account to account to make it difficult to execute a court order, etc. Under the rules the commercial lenders are now under, they can't write off even the smallest student loan debt, and were forced to expend far more than the value of that debt trying to recover it. In the end, they were obligated to call on the U.S. Marshals to bring the debtor to court under criminal charges.
If this isn't just one more reason to fight big government, I don't know what is. Given the explosive growth of student loans, and the outrageous escalation of higher education prices, expect to see the inevitable debtors prisons come into effect. Bankruptcy does not effect a student loan, and this case shows just how irrational a government will get to remind its subjects of its power.
It's a system gone amok!
self have had some trouble about utilities (though
I hope eventually to pay), because of no job. (I
have sometimes thought it unfortunate for the debt-
or that there are no debtors' prisons, as then there would be a place to live).
As to student loans, the lesson people can
learn from observing is: don't borrow money for
college. If you can't afford to go, don't go. If
you've got a job, work at it and save your mon-
ey. And if enough people do that, maybe col-
leges will come off their high horse and cut
their prices, and learn their place.
I suspect a lot of it is for attracting investors for the student loan bonds, there isn't any credit or income qualification for ability to repay, just a hope that the borrower will in the future. Almost 50% never finish school, so 1 in 2 on the future ability thing is already shaky.
If it could be ignored or discharged like any other debt, the system wouldn't exist, the Dept of Ed only services the loans, private investors fund them as Sallie Mae bonds, under normal terms that stuff would be like buying a lottery ticket with hopes of a return on your $1 investment.
The only example I've seen was recently in Houston or something like that, the guy had a $350,000 house and had been blowing off the sheriff and federal student loan collectors for 20 years. A deputy finally came by and he got belligerent, come back with a warrant, etc., so they did and added assault of a peace officer to it. The debt was originally like $1900... Very stupid... He probably could have settled it with an offer of $500 and a sob story.
I didn't feel sorry for him at all, he was a deadbeat trying to look like a victim with the civil engineering profession the same student loans bought him instead of working in Walmart or whatever.
We the tax payers would then have to pay for the construction of the prison(s), three hots and a cot, medical care and guards to control and contain them.
Having been a state corrections officer I could go on and on about other expenses such as administrative and maintenance.
Where debtors are concerned, I would call their incarceration throwing extorted taxpayer money plus some freshly printed money added to the national debt after owed debtor money.
Hey, and with that prison support money, we could pay instructors and buy materials so inmates may learn trade school stuff like carpentry and brick laying just like at the prison I retired from.
That way the released debtors with convictions on their records may have a better chance at finding a job with an engineering diploma.
Yep, the federal government versus rational thinking.
I can just see the newspaper ad similar to the one I saw when I was unemployed back in 1980. "Federal debtor prison personnel needed. Apply at (place and time)."